The Petroleum (Production) (Landward Areas) Regulations 1995

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 1991 (S.I. 1991/981), except as respects licences applied for before the date on which these Regulations come into force.

Regulation 3(3) disapplies the Petroleum (Production) Regulations 1982 (S.I. 1982/1000) in respect of applications made after the date on which these Regulations come into force for methane drainage licences and the model clauses that such licences may contain. The model clauses for methane drainage licences are now contained in Schedule 5 to these Regulations. The principal amendment to these model clauses is that model clause 3 no longer prescribes a 25 year term for the licence.

These Regulations introduce a single exploration and development licence which confers exclusive rights in relation to a particular landward area in place of the separate exploration, appraisal and development licences available under the 1991 Regulations. M.c.3 provides that the initial term of this licence is six years (which corresponds to the six year term of an exploration licence) which may be continued for a further five years (which corresponds to the five year term of an appraisal licence) and this can be extended for a 20 year period (which corresponds to the 20 year term of a development licence).

Regulation 7 of these Regulations implements paragraphs 1 to 5 inclusive of Article 3 and partially implements paragraph 1 of Article 5 of Council Directive 94/22/EEC on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons (O.J. L 164, 30.6.94, p. 3) by introducing a new procedure for applications for licences. Details of the blocks to be licensed, the latest date upon which applications are to be made and the period within which licences are to be granted are to be published in the Official Journal of the European Communities. The regulation also introduces a procedure whereby licensees may apply for a licence for an area contiguous to the area or areas covered by their existing licence if the Secretary of State decides that geological or production considerations justify the grant of such a licence.

Changes of substance in the model clauses are as follows. There is now no model clause which provides for the delivery of petroleum in place of the payment of the royalty. The Minister is prohibited from giving instructions to a licensee concerning the training of any employee or prospective employee without first consulting the Offshore Petroleum Industry Training Organisation Limited or any body exercising similar activities (m.c.24). The model clauses now specify the date for compliance with requests for information from the Secretary of State and modify the length of time for which information supplied pursuant to such requests remains confidential.

The model clauses for a supplementary seismic survey licence are now contained in Schedule 4 to these Regulations.