The Petroleum Licensing (Production) (Seaward Areas) Regulations 2008

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations prescribe the model clauses which, unless the Secretary of State thinks fit to modify or exclude them in any particular case, will be incorporated in petroleum production licences for seaward areas. The model clauses prescribed will apply for the purposes of the 25th and subsequent rounds of licensing for those areas.

As regards previous rounds of licensing, and as regards other kinds of petroleum licence, the model clauses previously prescribed, most recently by the Petroleum Licensing (Exploration and Production) (Seaward and Landward Areas) Regulations 2004 (S.I. 2004/352) (“the 2004 Regulations”) (as amended), will still apply.

In contrast to the three distinct sets of model clauses prescribed for production licences in seaward areas by the 2004 Regulations (for the different types of licence known as “Traditional”, “Frontier” and “Promote”), these Regulations prescribe a single set of model clauses which will apply in the case of all three types of licence. For the most part, the changes made are limited to clarifying and simplifying the existing provisions. In addition, however, clauses are added which (1) require certain contact details to be provided to the Minister; (2) give the Minister a power to require the plugging and abandonment of a suspended well; (3) amend the definition of a change of control in clause 41; and (4) enable the Minister to revoke the interests of one or more, rather than all, of the joint licensees of a licence. Those additional clauses are identical to clauses proposed to be inserted into all existing petroleum licences by provisions currently in Schedule 3 to the Energy Bill (Bill 53 of 2007-08).

An Impact Assessment has not been prepared for these Regulations. The Regulations have no impact on existing licences, applying only for the purpose of future licensing rounds; and for the most part the changes represent only a simplification of the existing model clauses, rather than a substantive change. However, in the case of the additional clauses referred to above, corresponding to those proposed by the Energy Bill, an assessment is contained at pp. 115-123 of the Impact Assessment for that Bill, which is available from the website of the Department for Business, Enterprise and Regulatory Reform at:

http://www.berr.gov.uk/energy/bill/page40931.html.