The Petroleum and Offshore Gas Storage and Unloading Licensing (Amendment) Regulations 2017

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend:

• the Petroleum Licensing (Production) (Seaward Areas) Regulations 2008 (S.I. 2008/225) (“the Seaward Regulations”);

• the Offshore Gas Storage and Unloading (Licensing) Regulations 2009 (S.I. 2009/2813);

• the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014 (S.I. 2014/1686); and

• the Petroleum Licensing (Applications) Regulations 2015 (S.I. 2015/766).

The Seaward Regulations prescribe the model clauses which, unless the Oil & Gas Authority (“OGA”) thinks fit to modify or exclude them in any particular case, shall be incorporated in seaward area production licences as defined in those Regulations. The model clauses as amended apply to all seaward area production licences granted on or after 15th September 2017 pursuant to an application for a licence made on or after 25th July 2017. Amongst other changes, the amendments:

• provide for the Initial Term of a licence to be divided into phases and for termination at the end of a phase when the criteria set out in the new model clause 4(1) to (3) have not been met;

• provide for termination on the expiry of any other deadline in the Work Programme for the Initial Term when the action required to be taken by that deadline has not been taken (see new model clause 4(4));

• provide for amendments to the Work Programme for the Initial Term to be agreed by way of notice from the Licensee and subsequent direction from the OGA, rather than by Deed of Variation (see new model clause 4A); and

• provide for extension of the phases of the licence (see new model clause 7). These are also to be agreed by way of of notice from the Licensee and subsequent direction from the OGA, rather than by Deed of Variation.

The Offshore Gas Storage and Unloading (Licensing) Regulations 2009 have been amended in order to replace references to repealed legislation. These amendments do not make any substantive change.

These Regulations also amend the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014. Clarificatory amendments have been made to model clauses 6 and 22A. Clause 22A extends to England and Wales only. Also, references to repealed legislation have been replaced, but these amendments do not make any substantive change.

The Petroleum Licensing (Applications) Regulations 2015 have been amended in order to replace references to “promote licences”, as the promote licence concept has been removed from the Seaward Regulations. A cross-reference to tax legislation has also been corrected.

An assessment of the effect that this instrument will have on the costs of business is available from the Department for Business, Energy and Industrial Strategy at 1 Victoria Street, London, SW1H 0ET and is published with the Explanatory Memorandum alongside this instrument on www.legislation.gov.uk. There is no impact on the public sector or voluntary sector.