The Petroleum Production (Amendment) Regulations (Northern Ireland) 2010

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations introduce new requirements for applications to the Department of Enterprise, Trade and Investment for licences to search, bore for and get petroleum in Northern Ireland and new provisions relating to licences. For this purpose, the Regulations amend the Petroleum Production Regulations (Northern Ireland) 1987 (the ‘1987 Regulations’).

The Regulations update some provisions in the 1987 Regulations, bringing them into line with arrangements in Great Britain and make some amendments consequential to the making of the Hydrocarbons Licensing Directive Regulations (Northern Ireland) 2010 (S.R. 2010 No. 170). Regulation 2(2) inserts new definitions in regulation 1(2) of the 1987 Regulations including a definition of “work programme” in relation to a licence and amends the definition of “application”. Regulation 2(3) substitutes a new regulation 2 in the 1987 Regulations to make clear that an application for a licence may be made at any time.

Regulation 2(4) substitutes a new regulation 3 in the 1987 Regulations – the new regulation requires an application to include the information set out in a new Schedule 1 to the 1987 Regulations and describes other information requirements for applications, including those made by bodies corporate and applicants which are not bodies corporate. Regulation 2(5) substitutes a new Schedule 1 (information to be included in an application for a licence) to the 1987 Regulations.

Regulation 2(6) makes various amendments to Schedule 2 (model clauses) to the 1987 Regulations. Regulation 2(6)(a) corrects an error in the definition of “development scheme” in Clause 1 and inserts definitions relating to the terms of a licence which bring arrangements more closely into line with those in Great Britain. These arrangements are set out in detail in regulation 2(6)(b) which inserts new Clauses 2, 2A, 2B and 2C into Schedule 2. They describe the various terms of a licence and how a licence may be continued from one term to the next. They also introduce the option of inserting a break clause in a licence and require a Licensee to surrender not less than half of the original licensed area by the end of the initial term. Clause 2B allows the Department to extend the second term of a licence by a direction in writing in order to secure maximum economic recovery of petroleum so long as such extensions in aggregate do not exceed 20 years.

Amendments to Clauses 3 and 9(4) of Schedule 2 consequential to the changes in definitions in regulation 2(6)(a) are made by regulation 2(6)(c) and (f)(ii) respectively. A new Clause 9(1) is substituted by regulation 2(6)(f)(i) to take account of the new break clause provisions. Regulation 2(6)(d) amends Clause 4 as a consequence of the new requirement to surrender not less than half the licensed area by the end of the initial term. Regulation 2(6)(e) inserts a new Clause 4A to clarify the rights and liabilities of a Licensee on determination of a licence or surrender of part of a licensed area. Further amendments to update Clauses 21, 22, 24, 39, 40 and 41 are made by regulation 2(6)(g) to (l).

A Regulatory Impact Assessment has not been prepared as the new procedure for applications for licences has no additional impact on business, charities or voluntary bodies.