SCHEDULE
Regulation 2(1)
MODEL CLAUSES FOR SEAWARD AREA PRODUCTION LICENCES
1. Interpretation, etc.
(1) In this licence, the following expressions have the following meanings—
“the Act” means the Petroleum Act 1998;
“Block” means an area comprised in this licence which is delineated on the reference map deposited at the principal office of the Department for Business, Enterprise and Regulatory Reform and to which a reference number was assigned at the date of this licence;
“Development Scheme” has the meaning given by clause 27;
“Drill-or-Drop Period” means the period (if any) specified as such in Schedule 5 to this licence;
“Early Surrender Area” means the area (if any) specified as such in Schedule 5 to this licence;
“Early Surrender Period” means the period (if any) specified as such in Schedule 5 to this licence;
“Fragmented Licensed Area” means a Licensed Area consisting in two or more areas any one or more of which is separated from the others;
“Half Year” means the period from 1st January to 30th June in any year and the period from 1st July to 31st December in any year;
“Initial Licensed Area” means the area described in Schedule 1 to this licence on the date it was granted;
“Initial Term” means the period specified as such in Schedule 5 to this licence;
“Licensed Area” means the area for the time being in which the Licensee may exercise the rights granted by this licence;
“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;
“Mandatory Surrender Area” means the area specified as such in Schedule 5 to this licence;
“the Minister” means the Secretary of State for Business, Enterprise and Regulatory Reform;
“Oil Field” has the meaning given in clause 27;
“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;
“Promote Period” means the period (if any) specified as such in Schedule 5 to this licence;
“Second Term” means the period specified as such in Schedule 5 to this licence;
“Section” means a part of a Block comprising an area bounded by minute lines of latitude and longitude one minute apart respectively;
“Start Date” means the date specified as such in Schedule 5 to this licence;
“Third Term” means the period specified as such in Schedule 5 to this licence;
“Well” includes borehole;
“Work Programme” means the programme set out in Schedule 3 to this licence.
(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 hereby grants to the Licensee exclusive licence and liberty during the continuance of this licence and subject to the provisions hereof to search and bore for, and get, Petroleum in the sea bed and subsoil under the seaward area more particularly described in Schedule 1 to this licence provided that nothing in this licence shall affect the right of the Minister to grant a methane drainage licence in respect of the whole or any part of the Licensed Area or affect the exercise of any rights granted under any such methane drainage licence.
3. Term of Licence
(1) This licence shall commence with the later of—
(a)
(a) the Start Date; and
(b)
(b) the date on which this licence was granted.
(2) Unless sooner determined under any of its provisions, and provided always that its terms and conditions continue to be performed and observed, this licence shall continue—
(i)
(i) for the Initial Term, subject to clause 4 and (where applicable) clauses 5 and 10;
(ii)
(ii) for the Second Term, subject to clauses 6, 7 and 10;
(iii)
(iii) for the Third Term, subject to clauses 8 and 10.
(3) On expiry of the Third Term, this licence shall determine unless extended in accordance with clause 9.
4. Initial Term
(1) Where a Drill-or-Drop Period is specified, this licence shall, unless the Minister in his discretion decides otherwise, automatically cease and determine on the expiry of that period in the event of failure by the Licensee before the expiry of that period to—
(a)
(a) take the actions that are described in Part I of the Work Programme; and
(b)
(b) undertake to complete on or before expiry of the Initial Term the work described in Part II of the Work Programme.
(2) Where a Promote Period is specified, this licence shall, unless the Minister in his discretion decides otherwise, automatically cease and determine on the expiry of that period in the event of failure by the Licensee before the expiry of that period to—
(a)
(a) take the actions that are described in Part I of the Work Programme;
(b)
(b) undertake to complete, before the expiry of the Initial Term, the work described in Part II of the Work Programme; and
(c)
(c) demonstrate to the satisfaction of the Minister (whose decision shall be final)—
(i) the financial capacity of the Licensee to meet the obligations undertaken under sub-paragraph (b) above in addition to all of the obligations imposed by this licence; and
(ii) the competence of the relevant persons to organise and supervise any of the operations of searching or boring for Petroleum.
(3) The relevant persons referred to in paragraph (2)(c)(ii) of this clause are—
(a)
(a) any person nominated by the Licensee for approval under clause 24 of this licence; or
(b)
(b) the Licensee, where the Licensee is one person and he has not nominated anybody for such approval.
5. Surrender during Initial Term (“Frontier” licences)
(1) This clause shall apply where an Early Surrender Area and an Early Surrender Period are specified.
(2) No later than one month before the expiry of the Early Surrender Period, the Licensee shall give notice in writing to the Minister indicating—
(a)
(a) that he will determine this licence in relation to a part of the Licensed Area which, when taken together with any one or more areas previously surrendered in accordance with clause 10, is no less than the Early Surrender Area; and
(b)
(b) the date no later than the expiry of the Early Surrender Period on which the surrender of that part of the Licensed Area shall take effect.
(3) If the Licensee fails to comply with his obligations under paragraph (2) of this clause, and unless the Minister directs otherwise, this licence shall expire at the end of the Early Surrender Period.
6. Option to continue licence into a Second Term
(1) At any time not later than one month before the expiry of the Initial Term the Licensee may—
(a)
(a) subject to payment of the sums specified in Schedule 2 and to performance of the terms and conditions contained in this licence including, without limitation, those conditions set out in paragraph (3) of this clause; and
(b)
(b) conditional upon due performance by the Licensee of the Work Programme before the expiry of the Initial Term,
give notice in writing to the Minister in the manner hereinafter provided that he desires this licence to continue in force in relation to part of the Licensed Area (“the Continuing Part”).
(2) Where the Licensee gives notice to the Minister in accordance with paragraph (1) of this clause such notice must indicate that he will determine this licence in relation to such part of the Licensed Area as shall be described by the Licensee in the notice (“the Surrendered Part”) in accordance with the requirements of paragraph (3) of this clause.
(3) Subject to paragraph (4) of this clause, the Surrendered Part must consist in an area which, when taken together with any one or more areas previously surrendered, is no less than the Mandatory Surrender Area.
(4) The Licensee shall not be obliged to surrender so much of the Licensed Area that following such surrender the Licensed Area comprises less than thirty Sections.
(5) Any notice served in accordance with paragraph (1) of this clause shall specify a date not later than the expiry of the Initial Term on which the Surrendered Part is to be surrendered.
(6) This licence shall upon the option...
