The Petroleum (Production) (Landward Areas) Regulations 1991

Explanatory Note

(This note is not part of the Regulations)

These Regulations provide for applications to the Secretary of State for licences to search for and get petroleum in Great Britain and those islands and waters adjacent to it which are “landward areas” as defined in the Regulations. They also set out model clauses which are to be incorporated in such licences unless the Secretary of State thinks fit to modify or exclude them in any particular case. The Regulations supersede the Petroleum (Production) (Landward Areas) Regulations 1984 (S.I. 1984/1832), except as respects licences applied for before the date on which these Regulations come into force.

As in the 1984 Regulations, there is provision for six-year exploration licences (incorporating model clauses set out in Schedule 3), five-year appraisal licences (incorporating model clauses set out in Schedule 5) and twenty-year development licences (incorporating model clauses set out in Schedule 6); all such licences confer exclusive rights in relation to a particular landward area. These Regulations also provide for the first time for a one-year, non-exclusive, supplementary seismic survey licence (incorporating model clauses set out in Schedule 4), which will permit the holder of an exclusive licence to extend a seismic survey for a distance of up to one kilometre beyond the boundary of the area to which that licence relates in order to obtain additional data concerning that area.

Other changes of substance introduced by the Regulations are as follows. In relation to exploration licences, there is provision for the Secretary of State to invite particular persons to apply for a licence in respect of a particular area by serving a notice on them (regulation 6(3)). This is in addition to the established provision for issuing a general invitation to apply for exploration licences by publishing a notice in the London and Edinburgh Gazettes. There are new provisions in the model clauses in Schedule 3 for an exploration licensee to surrender part of the area to which his licence relates (m.c. 4), and to undertake an extended well test of up to 90 days' duration (m.c. 9(1)). The minimum area to which an appraisal or development licence may relate is reduced (regulation 8(1)). Returns relating to the progress of operations under a licence are required to be submitted to the Secretary of State every six months rather than quarterly.