SCHEDULE 1
Regulation 3(2)
MODEL CLAUSES FOR EXPLORATION LICENCES
1. Interpretation
(1) In the following clauses the following expressions have the meanings hereby respectively assigned to them, that is to say—
“the Act” means the Petroleum Act 1998;
“the Exploration Area” means the area for the time being in which the Licensee may exercise the rights granted by this licence;
“Landward Area” means an area on the landward side of the baselines as set out in the Territorial Waters Order in Council 1964;
“the Licensee” means the person or persons to whom this licence is granted, his personal representatives and any person or persons to whom the rights conferred by this licence may lawfully have been assigned;
“the Minister” means the Secretary of State for Trade and Industry;
“Petroleum” includes any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata, but does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation;
“Seaward Area” means an area on the seaward side of the baselines as set out in the Territorial Waters Order in Council 1964 in respect of which the Minister may grant a licence pursuant to Part I of the Act;
“Well” includes borehole.
(2) Any obligations which are to be observed and performed by the Licensee shall at any time at which the Licensee is more than one person be joint and several obligations.
2. Grant of Licence
In consideration of the payments hereinafter provided for and the performance and observance by the Licensee of all the terms and conditions hereof, the Minister, in exercise of the powers conferred upon him by the Act and all other powers in that behalf enabling him, hereby grants to the Licensee licence and liberty in common with all other persons to whom the like right may have been granted or may hereafter be granted during the continuance of this licence and subject to the provisions hereof to search for Petroleum in the strata in the islands and in the sea bed and subsoil in any Seaward Area and in those parts of any Landward Area which are below the low water line provided that no rights conferred by this Licence shall be exercisable in any area in respect of which a licence (not being a methane drainage licence) is for the time being in force, entitling the grantee thereof to search and bore for and get Petroleum, except with the agreement of the holder of that licence to the exercise in any such area of any such rights.
3. Prospecting methods
The right to search for Petroleum conferred by this licence shall include prospecting and carrying out geological surveys by physical or chemical means and drilling for the purpose of obtaining geological information about strata in the Exploration Area but shall not include any right to get Petroleum or any right to drill Wells for production of Petroleum or any other Well of a depth exceeding three hundred and fifty metres below the surface of the sea bed or such greater depth as the Minister may from time to time approve either generally or in relation to a particular Well or in relation to a class of Wells to which that Well belongs.
4. Term of licence
This licence unless sooner determined under any of the provisions hereof shall be and continue in force for the term of three years from (startdate), but may, if the Minister sees fit and the Licensee has at least three months before the expiry of the said term made a written request for its extension, be continued for a further period of three years.
5. Right of Licensee to determine licence
Without prejudice to any obligation or liability imposed by or incurred under the terms and conditions hereof the Licensee may at any time determine this licence by giving to the Minister not less than six months' previous notice in writing to that effect.
6. Payment of consideration for licence
(1) The Licensee shall pay to the Minister during the term of this licence the consideration for the grant of this licence specified in Schedule 1 to this licence at the times and in the manner so specified.
(2) The Licensee shall not by reason of determination of this licence or of any reduction in the Exploration Area be entitled to be repaid or allowed any part of any sum payable to the Minister pursuant to this licence.
7. Commencement, abandonment and plugging of Wells
(1) The Licensee shall not commence, or recommence, the drilling of a Well without the consent in writing of the Minister.
(2) The Licensee shall not abandon any Well without the consent in writing of the Minister except as provided in paragraphs (5) and (6) of this clause.
(3) The Licensee shall ensure compliance with any conditions subject to which any consent under either of the foregoing paragraphs is given.
(4) If any such condition under paragraph (1) of this clause relates to the position, depth or direction of the Well or to any casing of the Well or any condition under either paragraph (1) or paragraph (2) of this clause relates to any plugging or sealing of the Well, the Minister may from time to time direct that the Well and all records relating thereto shall be examined in such manner upon such occasions or at such intervals and by such persons as may be specified by the Minister’s direction and the Licensee shall pay to any such person or to the Minister such fees and expenses for such examination as the Minister may specify.
(5) Where the Licensee’s rights in any area cease for the time being to be exercisable, by reason of the grant of such a licence as is mentioned in the proviso to clause 2 of this licence or by reason of the ending of any such agreement as is referred to in that proviso, the Licensee, unless the Minister otherwise determines, shall within one month after the date on which such rights cease to be exercisable plug any of the Licensee’s Wells in that area.
(6) All the Licensee’s Wells (other than Wells to which the last foregoing paragraph applies) in the Exploration Area shall, unless the Minister otherwise determines, be plugged by the Licensee not less than one month before the expiry or determination of the Licensee’s rights under this licence.
(7) The...
