ⒺⓉ Licence P1152
Petroleum Act 1998
SEAWARD PRODUCTION LICENCE
THE SECRETARY OF STATE FOR TRADE AND INDUSTRY
and
EDINBURGH OIL & GAS PLC
ENCANA (U.K.) LIMITED
PREMIER OIL EXPLORATION LIMITED
TULLOW OIL UK LIMITED
LICENCE to search and bore for and get petroleum in block(s) 39/2b, 39/7 ⒺⓉ Licence P1152
This Licence, made the day of between the Secretary of State for Trade and Industry, on behalf of Her Majesty, of the one part and the companies listed in Schedule 4 of the other part, witnesseth as follows:-
Part 1 – ‘Model Clauses’ Interpretations, etc. Grant of Licence 1.—(1) In the following clauses, the following 2. In consideration of the payments hereinafter expressions have the meanings hereby respectively provided and the performance and observance by the assigned to them, that is to say: Licensee of all the terms and conditions hereof, the Minister, in exercise of the powers conferred upon him "the Act" means the Petroleum Act 1998; by the Act hereby grants to the Licensee exclusive "Block" means an area comprised in this licence and liberty during the continuance of this Licence which is delineated on the reference Licence and subject to the provisions hereof to search map deposited at the principal office of the and bore for, and get, Petroleum in the sea bed and Department of Trade & Industry and to which subsoil under the seaward area comprising an area a reference number was assigned at the date more particularly described in Schedule 1 to this of this Licence; Licence being the area comprising Block(s) 39/2b, 39/7 on the reference map deposited at the principal "Development Scheme" has the meaning office of the Department of Trade and Industry: assigned thereto by clause 28; Provided that nothing in this Licence shall affect the "Half Year" means the period from 1st right of the Minister to grant a Methane Drainage January to 30th June in any year and the Licence in respect of the whole or any part of the period from 1st July to 31st December in any Licensed Area or affect the exercise of any rights so year; granted. "Initial Term" and "Second Term" have the Term of Licence meanings assigned thereto by clauses 3 and 4 respectively; 3.— Subject to Schedule 3 to this Licence, this Licence unless sooner determined under any of the provisions "the Licensed Area" means the area for the hereof shall be and continue in force for the term of time being in which the Licensee may four years beginning on 1 October 2003 (hereinafter exercise the rights granted by this Licence; called "the Initial Term"); but if the terms and "the Licensee" means the person or persons conditions of this Licence are duly performed and to whom this Licence is granted, his personal observed and, in particular, if the Work Programme representatives and any person or persons to described in Schedule 3 to this Licence has been duly whom the rights conferred by this Licence performed, it may be continued for a further term of may lawfully have been assigned; four years as provided by clause 4 of this Licence and, if the terms and conditions of this Licence continue to "the Minister" means the Secretary of State be duly performed and observed, thereafter as for Trade & Industry; provided by clause 5 (and subject to the provisions of "Oil Field" has the meaning assigned thereto clause 6) of this Licence for a further maximum period by clause 28; of eighteen years. "Petroleum" includes any mineral oil or Option to continue Licence as to part relative hydrocarbon and natural gas existing of the Licensed Area in its natural condition in strata but does not include coal or bituminous shales or other 4.—(1) At any time not later than three months before stratified deposits from which oil can be the expiry of the Initial Term the Licensee paying the extracted by destructive distillation; payments hereinafter provided and observing and performing the terms and conditions herein contained "Section" means a part of a Block comprising may give notice in writing to the Minister that he an area bounded by minute lines of latitude desires the Licence to continue as to a part of the and longitude one minute apart respectively; Licensed Area (hereinafter called "the Continuing "Well" includes borehole. Part") in the manner hereinafter provided and to determine as to the residue thereof (hereinafter called (2) Any obligations which are to be observed and "the Surrendered Part"). performed by the Licensee shall at any time at which the Licensee is more than one person be joint and (2) Such notice shall: several obligations.
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(a) describe the Surrendered Part which shall (a) the Minister has given a consent in be an area which shall together with any area pursuance of clause 17(1) of this Licence and previously surrendered in accordance with such consent is still in force at that date, or clause 7 hereof: (b) the Minister has in pursuance of clause (i) if the area originally comprised in 17(4) of this Licence approved a programme this Licence consisted of sixty or submitted to him in pursuance of clause 17(2) more Sections, be not less than half and such approval is still in force at that date, the number of such Sections; or or (ii) if the area originally comprised in (c) the Minister has served a programme on this Licence consisted of more than the Licensee in pursuance of clause 17(6) of thirty but less than sixty Sections, be this Licence and such programme is still in such a number of Sections as will force at that date, or leave a Continuing Part consisting of thirty Sections; (d) the Minister has in his discretion so directed in writing. provided that if the area originally comprised in this Licence consisted of not more than (4) Where the Minister has given a direction extending thirty Sections the Licensee shall not be the Second Term of this Licence in pursuance of obliged to surrender any part of the Licensed paragraph (3)(d) of this clause he may in his discretion, Area and provided that any area surrendered on notice in writing being given to him by the Licensee in accordance with this clause shall comply not later than three months before the expiry of such with clause 8 hereof; and extension or any further extension that he desires the Licence to continue in force thereafter, give a further (b) specify a date (hereinafter called "the direction that this Licence shall so continue in force. surrender date") not later than the expiry of the Initial Term upon which the Surrendered (5) Where this Licence continues in force by virtue of Part is to be surrendered. paragraph (3)(a), (b) or (c) of this clause it shall, subject to the provisions of clause 3 of this Licence, so (3) The Licensee may at any time not less than one continue in force for a further period of eighteen years month before the surrender date give further notice in after the expiry of the Second Term. writing to the Minister varying the part of the Licensed Area to be surrendered and in the event of such further (6) Where this Licence continues in force by virtue of a notice being given the provisions of the previous direction given in pursuance of paragraph (3)(d) or paragraphs of this clause shall apply mutatis mutandis further direction given in pursuance of paragraph (4) of to such notice but so that the surrender date specified this clause it shall, subject to the provisions of clause 3 in such notice shall be the same as that specified in hereof, continue in force for such further period after the first notice. the expiry of the Second Term as the Minister may prescribe provided that in any event the period for (4) This Licence shall upon the option conferred by this which this Licence continues in force after the expiry of clause being duly exercised but subject to the the Second Term by virtue of any such directions shall provisions of clause 3 of this Licence continue in not in aggregate exceed eighteen years. respect of the Continuing Part for a term of four years next after the surrender date ("the Second Term"). (7) A direction given by the Minister in pursuance of paragraph (3)(d) of this clause or further direction Continuance of Licence after the given by the Minister in pursuance of paragraph (4) of this clause may be given subject to such conditions as Second Term he may specify and (without prejudice to the generality 5.—(1) At any time not later than three months before of the foregoing) such conditions may, subject to the the expiry of the Second Term the Licensee paying the provisions of paragraph (6) of this clause, include payments hereinafter provided and observing and conditions as to the duration of the extension or further performing the terms and conditions herein contained extension (as the case may be) of the Second Term. may give notice in writing to the Minister that he desires this Licence to continue as to a part of the Power further to extend term of Licensed Area (hereinafter called "the Producing Licence Part"). 6. Where this Licence has continued in force by virtue (2) Such notice shall describe the Producing Part, of clause 5 of this Licence for a total period of eighteen which shall be an area that comprises no Section that years after the expiry of the Second Term, the Minister, is not the subject, wholly or in part, of a consent, on application being made to him in writing not later approval or programme described in paragraph (3) than three months before the expiry of such period, below. may in his discretion agree with the Licensee that this Licence shall continue in force thereafter for such (3) If such notice is given this Licence shall continue in further period as the Minister and the Licensee may force after the expiry of the Second Term as provided agree and subject to such modification of the terms by the following paragraphs of this clause in the event and conditions of this Licence (which modification may that before that date: include making provision for any further extension of
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the term of this Licence) as the Minister and the (2) The Licensee shall not by reason of determination Licensee may then agree is appropriate. of the Licence or surrender of any part of the Licensed Area be entitled to be repaid or allowed any sum Right of Licensee to determine Licence payable to the Minister pursuant to this Licence before or surrender part of Licensed the date of determination or surrender. Area 10.— Not used. 7.—(1) Without prejudice to any obligation or liability 11.— Not used. imposed by or incurred under the terms hereof the Licensee may at any time by giving to the Minister not 12.— Not used. less than six months' notice in writing to that effect to 13.—Not used. expire on an anniversary of the date of commencement of the Initial Term, determine this Measurement of Petroleum obtained Licence or surrender any part of the Licensed Area from the Licensed Area being a part which complies with clause 8 hereof. 14.—(1) The Licensee shall measure or weigh by a (2) A notice given pursuant to paragraph (1) of this method or methods customarily used in good oilfield clause may be cancelled by a further notice in writing practice and from time to time approved by the Minister given to the Minister not less than one month before all Petroleum won and saved from the Licensed Area. the expiration of the notice. (2) If and to the extent that the Minister so directs, the Areas surrendered duty imposed by paragraph (1) of this clause shall be 8.—(1) Within a Block any area surrendered by the discharged separately in relation to Petroleum won and Licensee pursuant to clause 7 of this Licence and any saved: area accordingly retained by him or, where the (a) from each part of the Licensed Area which surrendered or retained area comprises separate is an Oil Field for the purposes of the Oil parts, each part of each area shall, unless the Minister Taxation Act 1975, has otherwise agreed in writing before the date at which the appropriate notice is given by the Licensee (b) from each part of the Licensed Area which to the Minister: forms part of such an Oil Field extending beyond the Licensed Area, and (a) be bounded by minute lines of latitude extending not less than two minutes of (c) from each Well producing Petroleum from longitude and minute lines of longitude a part of the Licensed Area which is not extending not less than two minutes of within such an Oil Field. latitude; (3) If and to the extent that the Minister so directs, the (b) consist of not less than thirty Sections; preceding provisions of this clause shall apply as if the and duty to measure or weigh Petroleum included a duty to ascertain its quality or composition or both; and where (c) have boundaries which, whether they run a direction under this paragraph is in force, the north and south or east and west, either following provisions of this clause shall have effect as if coincide with the corresponding boundaries references to measuring or weighing included of the Block or are not less than two Sections references to ascertaining quality or composition. distant from those boundaries; (4) The Licensee shall not make any alteration in the and where the surrendered or retained area comprises method or methods of measuring or weighing used by separate parts, each part of that area shall be not less him or any appliances used for that purpose without than two Sections distant from any other part of that the consent in writing of the Minister and the Minister area. may in any case require that no alteration shall be (2) Upon the date on which any determination of this made save in the presence of a person authorised by Licence or any surrender of part of the Licensed Area the Minister. in manner provided by any clause of this Licence is to (5) The Minister may from time to time direct that any take effect the rights granted by this Licence shall weighing or measuring appliance shall be tested or cease in respect of the Licensed Area or of the part so examined in such manner, upon such occasions or at surrendered as the case may be but without prejudice such intervals and by such persons as may be to any obligation or liability imposed upon the Licensee specified by the Minister's direction and the Licensee or incurred by him under the terms of this Licence prior shall pay to any such person or to the Minister such to that date. fees and expenses for test or examination as the Payment of consideration for Licence Minister may specify. (6) If any measuring or weighing appliance shall upon 9.—(1) The Licensee shall make to the Minister as any such test or examination as is mentioned in the consideration for the grant of this Licence payments in last foregoing paragraph be found to be false or unjust accordance with Schedule 2 to this Licence. the same shall if the Minister so determines after considering any representations in writing made by the
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Licensee be deemed to have existed in that condition before a date specified in the notice, an appropriate during the period since the last occasion upon which programme for exploring for Petroleum in the Licensed the same was tested or examined pursuant to the last Area during a period so specified, the Licensee shall foregoing paragraph. comply with the notice; and for the purposes of this paragraph an appropriate programme is one which any Keeping of accounts person who, if he: 15.—(1) The Licensee shall keep in the United (a) were entitled to exploit the rights granted Kingdom full and correct accounts in a form from time by this Licence; and to time approved by the Minister of: (b) had the competence and resources (a) the quantity of Petroleum in the form of needed to exploit those rights to the best gas won and saved; commercial advantage; and (b) the quantity of Petroleum in any other (c) were seeking to exploit those rights to the form won and saved; best commercial advantage. (c) the name and address of any person to could reasonably be expected to carry out during the whom any Petroleum has been supplied by period specified in the notice, and that period must be the Licensee, the quantity so supplied, the within the term of this Licence. price or other consideration therefor and the place to which the Petroleum was conveyed (3) If a programme is submitted to the Minister in pursuant to the agreement for such supply; consequence of a notice served by him in pursuance and of paragraph (2) of this clause, then: (d) such other particulars as the Minister may (a) he shall not be entitled to revoke this from time to time direct. Licence on the ground that the programme does not satisfy the requirements of that (2) The quantities of Petroleum stated in such paragraph (hereafter in this clause referred to accounts may exclude any water separated from the as "the Relevant Requirements"); but Petroleum and shall be expressed as volumes in cubic metres measured at, or calculated as if measured at, a (b) if he is of opinion that the programme temperature of 15° Celsius and a pressure of 1.0132 does not satisfy the Relevant Requirements bar but if the Minister serves notice in writing on the he may serve a notice in writing on the Licensee determining any other manner in which any Licensee stating his opinion and the reasons quantity of Petroleum or any quantity of any form of for it. Petroleum is to be expressed that quantity shall be so (4) Where notice in respect of a programme is served expressed. on the Licensee in pursuance of paragraph (3) of this (3) Such accounts shall state separately the quantities clause he shall either: used for the purposes of carrying on drilling and (a) within 28 days beginning with the date of production operations and pumping to field storage, service of the notice refer to arbitration, in the and quantities not so used, and in the case of manner provided by clause 43 of this Petroleum not in the form of gas shall state the specific Licence, the question of whether the gravity of the Petroleum and, if Petroleum of different programme satisfies the Relevant specific gravities has been won and saved, the Requirements; or respective quantities of Petroleum of each specific gravity. (b) within a reasonable period beginning with that date submit to the Minister a further (4) The Licensee shall within two months after the end programme which satisfies the Relevant of each Half Year in which this Licence is in force and Requirements; within two months after the expiration or determination of this Licence deliver to the Minister an abstract in a and where it is determined in consequence of any form from time to time approved by the Minister of the reference to arbitration in pursuance of sub-paragraph accounts for that Half Year or for the period prior to (a) of this paragraph that the programme in question such expiration or determination as the case may be. does not satisfy the Relevant Requirements the Licensee shall submit to the Minister, as soon as Working obligations possible after the date of the determination, a further programme which satisfies the Relevant 16.—(1) The Licensee shall before the expiry of the Requirements. Initial Term of this Licence carry out such scheme of prospecting including any geological survey by any (5) The Licensee shall carry out any programme physical or chemical means and such programme of submitted by him in pursuance of this clause as to test drilling (hereinafter collectively referred to as a which either: "Work Programme") as may be set out in Schedule 3 to this Licence. (a) the Minister serves notice in writing on the Licensee stating that the Minister approves (2) If at any time the Minister serves a notice in writing the programme; or on the Licensee requiring him to submit to the Minister,
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(b) it is determined in consequence of any Petroleum in other forms, which, in each reference to arbitration in pursuance of this calendar year during the period aforesaid or Licence that the programmed satisfies the in such other periods during that period as Relevant Requirements; the Minister may specify, the Licensee proposes to get as mentioned in paragraph and any programme approved by the Minister in (1)(b) of this clause. pursuance of this paragraph shall be deemed for the purposes of this Licence to satisfy the Relevant (3) If the Minister directs the Licensee: Requirements. (a) to prepare different programmes in (6) Where, in consequence of any breach or non- pursuance of paragraph (2) of this clause in observance by the Licensee of any provision of respect of Petroleum from such different parts paragraph (2), (4) or (5) of this clause, the Minister has of the Licensed Area as are specified in the power by virtue of paragraph (1) of clause 42 of this direction; or Licence to revoke this Licence, he may if he thinks fit exercise that power in relation to such part only of the (b) where a programme approved or served Licensed Area as he may specify; and where he does in pursuance of this clause relates to a so the rights granted by this Licence shall cease in particular period during the term of this respect of the specified part of that area without Licence, to prepare a programme or prejudice to any obligation or liability imposed upon the programmes in pursuance of paragraph (2) of Licensee or incurred by him under the terms of this this clause in respect of a further period or Licence. further periods during that term, (7) Where the Licensee has a duty by virtue of this the Licensee shall comply with the direction. clause to carry out a programme during a part of the (4) It shall be the duty of the Minister expeditiously to term of this Licence, the Minister may serve notice in consider any programme submitted to him in pursuance of paragraph (2) of this clause in respect of pursuance of paragraph (2) of this clause and when he another part of that term. has done so to give notice in writing to the Licensee Development and production stating: programmes (a) that the Minister approves the programme; or 17.—(1) The Licensee shall not: (b) that the Minister approves the programme (a) erect or carry out any Relevant Works, subject to the condition that such of the either in the Licensed Area or elsewhere, for Relevant Works as are specified in the notice the purpose of getting Petroleum from that shall not be used before the expiration of the area or for the purpose of conveying to a period so specified in relation to the works or place on land Petroleum got from that area; shall not be used without the consent in or writing of the Minister; or (b) get Petroleum from that area otherwise (c) that the Minister rejects the programme on than in the course of searching for Petroleum one or both of the following grounds, namely: or drilling Wells, (i) that the carrying out of any except with the consent in writing of the Minister or in proposals included in the accordance with a programme which the Minister has programme in pursuance of approved or served on the Licensee in pursuance of paragraph (2) of this clause would the following provisions of this clause. be contrary to good oilfield practice; (2) The Licensee shall prepare and submit to the (ii) that the proposals included in the Minister, in such form and by such time and in respect programme in pursuance of sub- of such period during the term of this Licence as the paragraph (c) of the said paragraph Minister may direct, a programme specifying: (2) are, in the opinion of the Minister, not in the national interest; (a) the Relevant Works which the Licensee proposes to erect or carry out during that and a notice in pursuance of sub-paragraph (b) of this period for either of the purposes mentioned in paragraph may contain different conditions in respect paragraph (1)(a) of this clause; of different works. (b) the proposed locations of the works, the (5) Where the Minister gives notice of rejection of a purposes for which it is proposed to use the programme in pursuance of sub-paragraph (c) of works and the times at which it is proposed to paragraph (4) of this clause, then: begin and to complete the erection or carrying out of the works; (a) if the grounds of the rejection consist of or include the ground mentioned in paragraph (i) (c) the maximum and minimum quantities of of that sub-paragraph he shall include in the Petroleum in the form of gas and the notice a statement of the matters in maximum and minimum quantities of
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consequence of which he rejected the technical and financial factors which the programme on that ground; and Licensee considers are relevant in connection with the proposal; and (b) if the grounds of the rejection consist of or include the ground mentioned in paragraph (b) consider any such representations then (ii) of that sub-paragraph he shall include in made to him by the Licensee; and the the notice a statement of the rates at which Minister shall not approve a programme he considers that, in the national interest, subject to such a condition unless he is Petroleum should be got from the area to satisfied that the condition is required in the which the programme relates; and national interest. (c) the Licensee shall prepare and submit to (8) The Licensee shall carry out any programme the Minister, before the time specified in that approved or served on him by the Minister in behalf in the notice: pursuance of this clause or, if such a programme is varied in pursuance of clause 18 of this Licence, the (i) where the notice contains such a programme as so varied except so far as the Licensee statement as is mentioned in sub- is authorised in writing by the Minister to do otherwise paragraph (a) above, modifications or is required to do otherwise by such a condition as is of the programme which ensure that mentioned in paragraph (4)(b) of this clause; but if it is the carrying out of the programme necessary to carry out certain works in order to comply with those modifications would not with provisions included in a programme by virtue of be contrary to good oilfield practice; paragraph (5)(c) of this clause or provisions of a (ii) where the notice contains such a programme served on the Licensee in pursuance of statement as is mentioned in sub- paragraph (6) of this clause or provisions of a paragraph (b) above, modifications programme as varied in pursuance of clause 18 of this of the programme which ensure the Licence, then, notwithstanding anything in the getting of Petroleum from the area programme as to the time when those provisions are to there mentioned at the rates be complied with, the Licensee shall not be treated as specified in the statement and which having failed to comply with those provisions before (except so far as may be necessary the expiration of the period reasonably required for in order to get Petroleum at those carrying out the works. rates) are not such that the carrying (9) In this clause "Relevant Works" means any out of the programme with those structures and any other works whatsoever which are modifications would be contrary to intended by the Licensee to be permanent and are good oilfield practice; neither designed to be moved from place to place but the Licensee shall not be required by without major dismantling nor intended by the Licensee virtue of paragraph (i) of this sub-paragraph to be used only for searching for Petroleum. to submit modifications if the carrying out of the programme without modifications would Provisions supplementary to clause 17 not be contrary to good oilfield practice. 18.—(1) A consent given by the Minister in pursuance (6) If the Minister gives notice in writing to the Licensee of clause 17(1) of this Licence may be given subject to that the Minister approves the modifications of a such conditions as are specified in the document programme which have been submitted to him in signifying the consent and may in particular, without pursuance of sub-paragraph (c) of paragraph (5) of this prejudice to the generality of the preceding provisions clause, the programme with those modifications shall of this paragraph, be limited to a period so specified. be deemed to be approved by the Minister; but if the (2) Where: Licensee fails to perform the duty imposed on him by that sub-paragraph the Minister may if he thinks fit, (a) the Minister gives notice in respect of a instead of revoking this Licence in consequence of the programme in pursuance of paragraph (4)(a) failure, serve on the Licensee such a programme as or (b) or paragraph (6) of clause 17 of this the Minister considers that the Licensee should have Licence or serves a programme in pursuance submitted to him in respect of the area and period to of the said paragraph (6); or which the rejected programme related. (b) it is determined by arbitration that the (7) Where the Minister proposes to approve a Licensee is not required by virtue of programme subject to a condition in pursuance of paragraph (I) of clause 17(5)(c) of this paragraph (4)(b) of this clause or to reject a Licence to submit modifications of a programme in pursuance of paragraph (4)(c) of this programme in respect of which notice of clause or to serve a programme on the Licensee in rejection containing such a statement as is pursuance of paragraph (6) of this clause he shall mentioned in the said paragraph (I) was given before doing so: by the Minister in pursuance of clause 17(4) (c) of this Licence, (a) give the Licensee particulars of the proposal and an opportunity of making the Minister may give to the Licensee, with the notice representations to the Minister about the given or the programme served as mentioned in sub-
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paragraph (a) of this paragraph or, in a case falling and specify different dates in pursuance of within sub-paragraph (b) of this paragraph, within the this sub-paragraph for different provisions of period of three months beginning with the date of the the notice; arbitrator's or arbiter's determination, a notice (hereafter in this clause referred to as a "Limitation and the Minister may revoke such a further notice at a Notice") authorising the Minister, by a further notice particular time by serving on the Licensee a notice in given to the Licensee from time to time after the writing stating that the further notice is revoked at that expiration of the period specified in that behalf in the time. Limitation Notice, to provide that the programme to (6) Any question arising under clause 17 of this which the Limitation Notice relates shall have effect Licence or this clause as to what is, is not or is while the further notice is in force with the substitution required in the national interest or as to what is, or is for any quantity of Petroleum or any period specified in required by reason of, a national emergency shall be the programme in pursuance of clause 17(2)(c) of this determined by the Minister. Licence of a different quantity of Petroleum or a different period specified in the further notice. (7) The Licensee shall ensure that any conditions to which an approval is subject in pursuance of clause (3) A quantity or period specified in such a further 17(4)(b) of this Licence or a consent is subject in notice as that to be substituted for a quantity or period pursuance of paragraph (1) of this clause are complied which is specified in the programme in question shall with. be within the limits specified in the Limitation Notice as those applicable to that quantity or period specified in (8) If in respect of part of the Licensed Area the programme; and those limits shall be such as to (a) a consent has been given in pursuance of secure that the expenditure to be incurred by the paragraph (1) of clause 17 of this Licence; or Licensee in complying with the further notice, in a case where an effect of the notice is to increase the quantity (b) the Licensee has submitted to the of Petroleum which the Licensee is required to get Minister, in accordance with a direction given from the Licensed Area in any period, is less than the by virtue of paragraph (3)(a) of that clause, a cost of drilling a new Well in the Licensed Area at the programme in pursuance of paragraph (2) of time when the further notice is given. that clause: (4) Where the Minister proposes to give a Limitation (i) as respects which the Minister Notice or any such further notice as aforesaid he shall has served notice in pursuance of before doing so: paragraph (4)(a) or (b) or paragraph (6) of that clause, or (a) give the Licensee particulars of the proposal and an opportunity of making (ii) in consequence of which the representations to the Minister about the Minister has served a programme technical and financial factors which the on the Licensee in pursuance of the Licensee considers are relevant in connection said paragraph (6), or with the proposal; and (iii) in respect of which it has been (b) consider any such representations then determined by arbitration that the made to him by the Licensee; Licensee is not required by virtue of paragraph (5)(c)(i) of that clause to and the Minister shall not give such a further notice of submit modifications, which an effect is to increase the quantity of Petroleum which the Licensee is required to get from the paragraph (1) of clause 42 of this Licence shall not Licensed Area during any period unless the Minister is authorise the Minister to revoke this Licence in relation satisfied that the notice is required by reason of a to that part of the Licensed Area in consequence of national emergency and shall not give any other such any breach or non-observance, while the consent is in further notice as aforesaid unless he is satisfied that force or during the period to which the programme the notice is required in the national interest. relates, of any provision of the said clause 17 in connection with a different part of the Licensed Area. (5) A Limitation Notice or such a further notice as aforesaid may: (9) Where in consequence of any breach or non- observance by the Licensee of any provision of clause (a) specify any quantity or period by 17 of this Licence the Minister has power by virtue of reference to such factors as the Minister paragraph (1) of clause 42 of this Licence to revoke thinks fit; and this Licence or, in consequence of paragraph (8) of this (b) in the case of such a further notice, clause, to revoke it in respect of part only of the contain provisions as to: Licensed Area, he may if he thinks fit: (i) the date when the notice is to (a) in a case where he has power to revoke come into force, this Licence, exercise the power in relation to such part only of the Licensed Area as he (ii) the date when the notice is to may specify; and cease to be in force,
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(b) in a case where by virtue of the said for further working together with all casings and any paragraph (8) he has power to revoke it in Well head fixtures the removal whereof would cause respect of part only of the Licensed Area, damage to such wells. exercise the power in relation to such portion only of that part as he may specify; (10) All casings and fixtures left in position pursuant to paragraph (8) of this Clause shall be the property of and where in consequence of the said paragraph (8) or the Minister. by virtue of the preceding provisions of this paragraph the Minister revokes this Licence in respect of a part or Distance of Wells from boundaries of portion of the Licensed Area, the rights granted by this Licensed Area Licence shall cease in respect of that part or portion without prejudice to any obligation or liability imposed 20. No Well shall except with the consent in writing of upon the Licensee or incurred by him under the terms the Minister be drilled or made so that any part thereof of this Licence. is less than one hundred and twenty-five metres from any of the boundaries of the Licensed Area. Commencement and abandonment and plugging of Wells Control of Development Wells 21.—(1) The Licensee shall not suspend work on the 19.—(1) The Licensee shall not commence or drilling of a Development Well, or having suspended it recommence the drilling of any Well without the in accordance with this paragraph shall not begin it consent in writing of the Minister. again, except with the consent in writing of the Minister (2) The Licensee shall not abandon any Well without and in accordance with the conditions, if any, subject the consent in writing of the Minister. to which the consent is given. (3) The Licensee shall ensure compliance with any (2) When work on the drilling of a Development Well is conditions subject to which any consent under either of suspended in accordance with paragraph (1) of this the foregoing paragraphs is given. clause, the Licensee shall forthwith furnish the Minister with such information relating to the Well as the (4) If any such condition under paragraph (1) of this Minister may specify. clause relates to the position, depth or direction of the Well, or to any casing of the Well or if any condition (3) The Licensee: under either paragraph (1) or paragraph (2) of this (a) shall not do any Completion Work in clause relates to any plugging or sealing of the Well, respect of a Well in the Licensed Area except the Minister may from time to time direct that the Well in accordance with a programme of and all records relating thereto shall be examined in Completion Work approved by the Minister in such manner upon such occasions or at such intervals respect of the Well; and by such person as may be specified by the Minister's direction and the Licensee shall pay to any (b) shall furnish to the Minister, in accordance such person or to the Minister such fees and expenses with the provisions of such a programme, for such examination as the Minister may specify. particulars of any Completion Work done by him in respect of a Well in the Licensed Area; (5) The plugging of any Well shall be done in and accordance with a specification approved by the Minister applicable to that Well or to Wells generally or (c) shall not remove or alter any casing or to a class of Wells to which that Well belongs and shall equipment installed by way of Completion be carried out in an efficient and workmanlike manner. Work in respect of a Well except with the consent in writing of the Minister and in (6) Subject to paragraph (8) of this Clause, any Well accordance with the conditions, if any, drilled by the Licensee pursuant to this Licence shall subject to which the consent is given. be plugged and sealed in accordance with paragraphs (2), (3), (4) and (5) of this Clause, not less than one (4) In this clause: month before the expiry or determination of the Licensee's rights in respect of the area or part thereof "Completion Work", in relation to a Well, in which that Well is drilled. means work, by way of the installation of a casing or equipment or otherwise after the (7) Not used. Well has been drilled, for the purpose of bringing the Well into use as a Development (8) A direction by the Minister may be given by notice Well; and in writing to the Licensee not less than one month before the Licensee’s rights in respect of the area or "Development Well" means a Well which the part thereof in which the Well is situate, expire or Licensee uses or intends to use in connection determine so as to relieve the Licensee of the with the getting of Petroleum in the Licensed obligation imposed by paragraph (6) of this Clause to Area, other than a Well which for the time plug and seal the Well. being he uses or intends to use only for searching for Petroleum. (9) Any well that, pursuant to a direction by the Minister under paragraph (8) of this Clause, has not been plugged and sealed, shall be left in good order and fit
Page 9 ⒺⓉ Licence P1152
Provision of storage tanks, pipes, period of two years beginning with the date when the pipelines or other receptacles Minister receives the application. (5) If the Minister gives notice in writing to the Licensee 22. The Licensee shall use methods and practice stating that, in consequence of plans made by the customarily used in good oilfield practice for confining Licensee which the Minister considers are reasonable, the Petroleum obtained from the Licensed Area in the Minister will entertain an application for consent in tanks, gasholders, pipes, pipe-lines or other pursuance of paragraph (3) of this clause which receptacles constructed for that purpose. specifies a date after the expiration of a period Avoidance of harmful methods of mentioned in the notice which is shorter than the period mentioned in paragraph (4) of this clause, an working application made in consequence of the notice may 23.—(1) The Licensee shall maintain all apparatus and specify, as the date on which the applicant proposes to appliances and all Wells in the Licensed Area which begin flaring or use in question, a date after the have not been abandoned and plugged as provided by expiration of that shorter period. clause 19 of this license in good repair and condition (6) Before deciding to withhold consent or to grant it and shall execute all operations in or in connection subject to conditions in pursuance of paragraph (3) of with the Licensed Area in a proper and workmanlike this clause, the Minister shall give the Licensee an manner in accordance with methods and practice opportunity of making representations in writing to the customarily used in good oilfield practice and without Minister about the technical and financial factors which prejudice to the generality of the foregoing provision the Licensee considers are relevant in connection with the Licensee shall take all steps practicable in order: the case and shall consider any such representations (a) to control the flow and to prevent the then made to him by the Licensee. escape or waste of Petroleum discovered in (7) Consent in pursuance of paragraph (3) of this or obtained from the Licensed Area; clause shall not be required for any flaring which, in (b) to conserve the Licensed Area for consequence of an event which the Licensee did not productive operations; foresee in time to deal with it otherwise than by flaring, is necessary in order: (c) to prevent damage to adjoining Petroleum bearing strata; (a) to remove or reduce the risk of injury to persons in the vicinity of the Well in question; (d) to prevent the entrance of water through or Wells to Petroleum bearing strata except for the purposes of secondary recovery; and (b) to maintain a flow of Petroleum from that or any other Well; (e) to prevent the escape of Petroleum into any waters in or in the vicinity of the Licensed but when the Licensee does any flaring which is Area. necessary as aforesaid he shall forthwith inform the Minister that he has done it and shall, in the case of (2) The Licensee shall comply with any instructions flaring to maintain a flow of Petroleum, stop that flaring from time to time given by the Minister in writing upon being directed by the Minister to stop it. relating to any of the matters set out in the foregoing paragraph. If the Licensee objects to any such (8) The Licensee shall give notice to the Minister of instruction on the ground that it unreasonable he may, any event causing escape or waste of Petroleum, within fourteen days from the date upon which the damage to Petroleum bearing strata or entrance of same was given, refer the matter to arbitration in water through Wells to Petroleum bearing strata except manner provided by clause 43 of this Licence. for the purposes of secondary recovery forthwith after the occurrence of that event and shall, forthwith after (3) Notwithstanding anything in the preceding the occurrence of any event causing escape of provisions of this clause, the Licensee shall not: Petroleum into the sea, give notice of the event to the Chief Inspector of Her Majesty's Coastguard. (a) flare any gas from the Licensed Area; or (9) The Licensee shall comply with any reasonable (b) use gas for the purpose of creating or instructions from time to time given by the Minister with increasing the pressure by means of which a view to ensuring that funds are available to discharge Petroleum is obtained from that area, any liability for damage attributable to the release or except with the consent in writing of the Minister and in escape of Petroleum in the course of activities accordance with the condition, if any, of the consent. connected with the exercise of rights granted by this Licence; but where the Minister proposes to give such (4) An application for consent in pursuance of instructions he shall before giving them: paragraph (3) of this clause must be made in writing to the Minister and must specify the date on which the (a) give the Licensee particulars of the Licensee proposes to begin the flaring or use in proposal and an opportunity of making question; and subject to paragraph (5) of this clause representations to the Minister about the that date must not be before the expiration of the proposal; and
Page 10 ⒺⓉ Licence P1152
(b) consider any representations then made is in the national interest in order to secure the to him by the Licensee about the proposal. maximum ultimate recovery of Petroleum and in order to avoid unnecessary competitive drilling that the Oil Appointment of operators Field should be worked and developed as a unit in co- operation by all persons including the Licensee whose 24.—(1) The Licensee shall ensure that another Licences extend to or include any part thereof the person (including, in the case where the Licensee is following provisions of this clause shall apply. two or more persons, any of those persons) does not exercise any function of organising or supervising all or (2) Upon being so required by notice in writing by the any of the operations of searching or boring for or Minister the Licensee shall co-operate with such other getting Petroleum in pursuance of this Licence unless persons, being persons holding Licences under the Act that other person is a person approved in writing by the in respect of any part or parts of the Oil Field Minister and the function in question is one to which (hereinafter referred to as "the other Licensees") as that approval relates. may be specified in the said notice in the preparation of a scheme (hereinafter referred to as "a Development (2) The Minister shall not refuse to give his approval of Scheme") for the working and development of the Oil a person in pursuance of paragraph (1) of this clause if Field as a unit by the Licensee and the other that person is competent to exercise the function in Licensees in co-operation, and shall, jointly with the question, but where an approved person is no longer other Licensees, submit such scheme for the approval competent to exercise that function the Minister may, of the Minister. by notice in writing given to the Licensee, revoke his approval. (3) The said notice shall also contain or refer to a description of the area or areas in respect of which the Fishing and navigation Minister requires a Development Scheme to be 25. The Licensee shall not carry out any operations submitted and shall state the period within which such authorised by this Licence in or about the Licensed scheme is to be submitted for approval by the Minister. Areas in such manner as to interfere unjustifiably with (4) If a Development Scheme shall not be submitted to navigation or fishing in the waters of the Licensed Area the Minister within the period so stated or if a or with the conservation of the living resources of the Development Scheme so submitted shall not be sea. approved by the Minister, the Minister may himself 26. Not used. prepare a Development Scheme which shall be fair and equitable to the Licensee and all other Licensees, Training and the Licensee shall perform and observe all the terms and conditions thereof. 27.—(1) The Minister may from time to time give to the Licensee instructions in writing as to the training of (5) If the Licensee shall object to any such persons employed or to be employed, whether by the Development Scheme prepared by the Minister he Licensee or by any other person, in any activity which may within 28 days from the date on which notice in is related to the exercise of the rights granted by this writing of the said scheme shall have been given to Licence and the Licensee shall ensure that any him by the Minister refer the matter to arbitration in the instructions so given are complied with. manner provided by clause 43 of this Licence. (2) The Minister shall not give instructions in (6) Any such Development Scheme or the award of pursuance of paragraph (1) of this clause unless he any arbitrator in relation thereto shall have regard to has consulted as to the provisions proposed to be any direction pursuant to clause 29 of this Licence in included in such instructions the Petroleum Industry force at the date of such scheme. Training Board or such other body of a like nature as may from time to time be carrying on activities of a Directions as to Oil Fields across substantially similar kind to those at present performed boundaries by the said Board. 29.—(1) Where the Minister is satisfied that any strata (3) The Licensee shall furnish the Minister with such in the Licensed Area or any part thereof form part of an information relating to the training of persons referred Oil Field, other parts whereof are in an area to which to in paragraph (1) of this clause as the Minister may the Minister's powers to grant Licences pursuant to the from time to time request. Act do not apply and the Minister is satisfied that it is expedient that the Oil Field should be worked and Unit development developed as a unit in co-operation by the Licensee and all other persons having an interest in any part of 28.—(1) If at any time in which this Licence is in force the Oil Field, the Minister may from time to time by the Minister shall be satisfied that the strata in the notice in writing give to the Licensee such directions as Licensed Area or any part thereof form part of a single the Minister may think fit, as to the manner in which the geological Petroleum structure or Petroleum field rights conferred by this Licence shall be exercised. (hereinafter referred to as "an Oil Field") other parts whereof are formed by strata in areas in respect of (2) The Licensee shall observe and perform all such which other Licences granted in pursuance of the Act requirements in relation to the Licensed Area as may are then in force and the Minister shall consider that it be specified in any such direction.
Page 11 ⒺⓉ Licence P1152
(3) Any such direction may add to, vary or revoke the (d) a statement of any Petroleum, water, provisions of a Development Scheme. mines or workable seams of coal or other minerals encountered in the course of the 30. Not used. said operations; and Licensee to keep records (e) a statement of all Petroleum won and saved. 31.—(1) The Licensee shall keep accurate records in a form from time to time approved by the Minister of the (2) Within two months after the end of each calendar drilling, deepening, plugging or abandonment of all year in which this Licence is in force and within two walls and of any alterations in the casing thereof. Such months after the expiration or determination of this records shall contain particulars of the following Licence or any renewal thereof the Licensee shall matters: furnish to the Minister an annual return in a form from time to time approved by the Minister of the operations (a) the site of and number assigned to every conducted in the Licensed Area during that year or the Well; period prior to such expiration or determination as the (b) the subsoil and strata through which the case may be together with a plan upon a scale Well was drilled; approved by the Minister showing the situation of all Wells. The Licensee shall also indicate on the said (c) the casing inserted in any Well and any plan all development and other works executed by him alteration to such casing; in connection with searching, boring for or getting (d) any Petroleum, water, mines or workable Petroleum. seams of coal encountered, and (3) The Licensee shall furnish the Minister with such (e) such other matters as the Minister may information as the Minister may from time to time from time to time direct. request about any aspect of activities of the Licensee which are attributable directly or indirectly to the grant (2) The Licensee shall keep in the United Kingdom of this Licence, except that the Licensee shall not by accurate geological plans and maps relating to the virtue of this paragraph be required to furnish Licensed Area and such other records in relation information in respect of his activities in connection thereto as may be necessary to preserve all with any crude oil after he has appropriated it for information which the Licensee has about the geology refining by him. of the Licensed Area. (4) The Licensee shall comply with any request for (3) The Licensee shall deliver copies of the said information made in accordance with paragraph (3) records, plans and maps referred to in the two above either— foregoing paragraphs to the Minister when requested to do so either— (a) within any time limit specified in the request; or (a) within any time limit specified in the request; or (b) if there is no time limit specified, within four weeks of the request. (b) if there is no time limit specified, within four weeks of the request. Licensee to keep samples Returns 33.—(1) As far as reasonably practicable the Licensee shall correctly label and preserve for reference for a 32.—(1) The Licensee shall furnish to the Minister period of five years samples of the sea bed and of the three months from the date of this Licence and at strata encountered in any Well and samples of any intervals of three months thereafter during the period in Petroleum or water discovered in any Well in the which this Licence is in force a return in a form from Licensed Area. time to time approved by the Minister of the progress of his operations in the Licensed Area. Such return (2) The Licensee shall not dispose of any sample after shall contain: the expiry of the said period of five years unless: (a) a statement of all geological work, (a) he has at least six months before the date including surveys and tests, which has been of the disposal given notice in writing to the carried out and the areas in which and the Minister of his intention to dispose of the persons by whom the work has been carried same; and out and the results thereof; (b) the Minister or any person authorised by (b) the number assigned to each Well, and in him has not within the said period of six the case of any Well the drilling of which was months informed the Licensee in writing that begun or the number of which has been he wishes the sample to be delivered to him. changed during such period of three months, (3) The Minister or any person authorised by him shall the site thereof; be entitled at any time: (c) a statement of the depth drilled in each Well;
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(a) to inform the Licensee in writing that he representations made to him by the wishes part of any sample preserved by the Licensee about the publication of Licensee to be delivered to him; or data in pursuance of this sub- paragraph. (b) to inspect and analyse any sample preserved by the Licensee. Inspection of records etc. (4) The Licensee shall forthwith comply with any 35. The Licensee shall: request for the delivery of the whole or any part of any sample which is made in accordance with the (a) permit any person in the service or preceding provisions of this clause. employment of the Crown who is appointed by the Minister for the purpose to inspect, and Reports to be treated as confidential to take copies of and make notes from, all books, papers, maps and other records of 34. All records, returns, plans, maps, samples, any kind kept by the Licensee in pursuance of accounts and information (in this clause referred to as this Licence or in connection with activities "the specified data") which the Licensee is or may be about which the Minister is entitled to obtain from time to time required to furnish under the information in pursuance of clauses 27(3) and provisions of this Licence shall be supplied at the 32(3) of this Licence; and expense of the Licensee and shall not (except with the consent in writing of the Licensee which shall not be (b) furnish that person at reasonable times unreasonably withheld) be disclosed to any person not with such information and provide him at in the service or employment of the Crown: reasonable times with such reasonable assistance as he may request in connection Provided that: with or arising out of an inspection in (i) the Minister shall be entitled at any time to pursuance of this clause. make use of any of the specified data for the purpose of preparing and publishing such Rights of access returns and reports as may be required of the 36. Any person or persons authorised by the Minister Minister by law; shall be entitled at all reasonable times to enter into (ii) the Minister shall be entitled at any time to and upon any of the Licensee's installations or furnish any of the specified data to the equipment used or to be used in connection with Natural Environment Research Council and searching, boring for or getting Petroleum in the to any other body of a like nature as may Licensed Area for the purpose hereinafter mentioned: from time to time be carrying on activities of a (a) to examine the installations, Wells, plant, substantially similar kind to the geological appliances and works made or executed by activities at present carried on by the said the Licensee in pursuance of the Licence and Council; the state of repair and condition thereof; and (iii) the Minister, the said Council and any (b) to execute any works or to provide and such other body shall be entitled at any time install any equipment which the Minister may to prepare and publish reports and surveys of be entitled to execute or provide and install in a general nature using information derived accordance with the provisions hereof. from any of the specified data; (iv) the Minister, the said Council and any Power to execute works other such body shall be entitled to publish 37. If the Licensee shall at any time fail to perform the any of the specified data of a geological, obligations arising under the terms and conditions of scientific or technical kind either— any of clauses 14, 19, 22, 23 or 26 of this Licence, the (a) after the expiration of the period Minister shall be entitled, after giving to the Licensee of three years beginning with the reasonable notice in writing of such his intention, to date when the data was due to be execute any works and to provide and install any supplied to the Minister in equipment which in the opinion of the Minister may be accordance with clause 31 or 32 of necessary to secure the performance of the said this Licence, or if earlier, the date obligations or any of them and to recover the costs and when the Minister received that expenses of so doing from the Licensee. data; Right of distress (b) after the licence ceases to have 38. If and whenever any of the payments mentioned in effect, whether because of its clause 9(1) of this Licence or any part thereof shall be determination (‘surrender’), in arrear or unpaid for 28 days next after any of the revocation or effluxion of time; or days whereon the same ought to be paid (whether the (c) after the expiration of such same shall have been legally demanded or not) then longer period as the Minister may and so often as the same may happen the Minister determine after considering any may (as an additional remedy and without prejudice to
Page 13 ⒺⓉ Licence P1152
any other rights and remedies to which he would be Licensed Area without the consent of the entitled) do diligence in respect thereof in like manner Licensee; or as a landlord may do diligence in respect of unpaid arrears of rent and such diligence shall be effectual to (b) the holder of a Licence granted by the attach all or any of the stocks of Petroleum, engines, Minister to search and bore for, and get, machinery, tools, implements and other effects Petroleum in an area adjacent to the belonging to the Licensee which shall be found on or Licensed Area. about any of the Licensee's installations and and if the information intended to be obtained by such equipment used or to be used in connection with survey is reasonably necessary to enable that holder searching, boring for or getting Petroleum in the more efficiently to exercise the rights granted by the Licensed Area, and where in pursuance of such a Licence which he holds from the Minister. diligence a sale of such effects as shall have been attached thereby takes place the Minister may out of (3) The Licensee shall not enter into any agreement the proceeds thereof retain and pay all the arrears of providing for a person other than the Licensee to the said payments and also the expenses of an become entitled to, or to any proceeds of sale of, any incident to such diligence and sale and shall pay the Petroleum which, at the time when the agreement is surplus there (if any) to the Licensee. made, has not been but may be won and saved from the Licensed Area unless the terms of the agreement Indemnity against third party claims have been approved in writing by the Minister either unconditionally or subject to conditions, but the 39. The Licensee shall at all times keep the Minister preceding provisions of this paragraph do not apply to: effectually indemnified against all actions, proceedings, costs, charges, claims and demands whatsoever which (a) an agreement for the sale of such may be made or brought against the Minister by any Petroleum under which the price is payable third party in relation to or in connection with this after the Petroleum is won and saved; and Licence or any matter or thing done or purported to be (b) an agreement in so far as it provides that, done in pursuance thereof. after any Petroleum has been won and saved Advertisements, prospectuses etc. from the Licensed Area, it shall be exchanged for other Petroleum. 40. No statement shall be made either in any notice, advertisement, prospectus or other document issued (4) The Licensee shall not, without the consent of the by or to the knowledge of the Licensee or in any other Minister, dispose of any Petroleum won and saved in manner claiming or suggesting whether expressly or the Licensed Area or any proceeds of sale of such by implication that Her Majesty or any Government Petroleum in such a manner that the disposal does, to Department or any person or body acting on behalf of the knowledge of the Licensee or without his knowing Her Majesty has or have formed or expressed any it, fulfil or enable another person to fulfil obligations opinion that the Licensed Area is from its geological which a person who controls the Licensee, or a person formation or otherwise one in which Petroleum is likely who is controlled by a person who controls the to be obtainable. Licensee, is required to fulfil by an agreement which, if the person required to fulfil the obligations were the Restrictions on assignment, etc. Licensee, would be an agreement of which the terms require approval by virtue of paragraph (3) of this 41.—(1) The Licensee shall not, except with the clause; and subsections (2) and (4) to (6) of section consent in writing of the Minister and in accordance 416 of the Income and Corporation Taxes Act 1988 with the conditions (if any) of the consent do anything shall apply, for the purposes of determining whether for whatsoever whereby, under the law (including the rules the purposes of this paragraph a person has control of of equity) of any part of the United Kingdom or of any another person, with the following modifications, other place, any right granted by this Licence or namely: derived from a right so granted becomes exercisable by or for the benefit of or in accordance with the (a) for the words "the greater part" wherever directions of another person. they occur in the said subsection (2) there shall be substituted the words "one-third or (2) An agreement permitting the carrying out of more"; and geological surveys by physical or chemical means in the Licensed Area otherwise than by drilling is not (b) in the said subsection (6), for the word prohibited by paragraph (1) of this clause if the person "may" there shall be substituted the word by whom such surveys are to be carried out is: "shall", the words from "and such attributions" onwards shall be omitted and in the other (a) the holder of a Licence granted by the provisions of that subsection any reference to Minister of the right, in common with all other an associate of a person shall be construed persons to whom the like right may have as including only a relative of his (as defined been granted, to search for Petroleum in by section 417(4) of that Act), a partner of his respect of an area which would include the and a trustee of a settlement (as defined by Licensed Area, but for a proviso therein section 681(4) of that Act) of which he is a excluding the exercise of such right in the beneficiary.
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(5) Where the Licensee is two or more persons, then, (ii) any commercial activities in without prejudice to the preceding provisions of this connection with those operations clause, none of those persons shall enter into an from a fixed place within the United agreement with respect to the entitlement of any of Kingdom; them to: (h) any breach of a condition subject to which (a) the benefit of any right granted by this the Minister gave his approval in pursuance Licence; or of clause 41(3) of this Licence; (b) any Petroleum won and saved from the (i) any breach of clause 41(5) of this Licence; Licensed Area; or and where two or more persons are the Licensee any (c) any proceeds of sale of such Petroleum, reference to the Licensee in sub-paragraphs (c) to (g) of this paragraph is a reference to any of those unless the terms of the agreement have been persons. approved in writing by the Minister, but the preceding provisions of this paragraph do not apply to an (3) The Minister may revoke this Licence, with the like agreement for the sale of such Petroleum under which consequences as are mentioned in paragraph (1) of the price is payable after the Petroleum is won and this clause, if: saved and an agreement in so far as it provides that, after any Petroleum has been won and saved from the (a) the Licensee is a company; and Licensed Area, shall be exchanged for other (b) there is a change in the control of the Petroleum. Licensee; and Power of revocation (c) the Minister serves notice in writing on the Licence stating that the Minister proposes to 42.—(1) If any of the events specified in the following revoke this Licence in pursuance of this paragraph shall occur then and in any such case the paragraph unless such a further change in Minister may revoke this Licence and thereupon the the control of the Licensee as is specified in same and all the rights hereby granted shall cease and the notice takes place within the period of determine but subject nevertheless and without three months beginning with the date of prejudice to any obligation or liability incurred by the service of the notice; and Licensee or imposed upon him by or under the terms and conditions hereof. (d) that further change does not take place within that period. (2) The events referred to in the foregoing paragraph are: (4) There is a change in the control of the Licensee for the purposes of paragraph (3)(b) of this clause (a) any payments mentioned in clause 9(1) of whenever a person has control of the Licensee who this Licence or any part thereof being in did not have control of the Licensee when this Licence arrear or unpaid for two months next after any was granted; and subsections (2) and (4) to (6) of of the days whereon the same ought to have section 416 of the Income and Corporation Taxes Act been paid; 1988 shall apply, for the purpose of determining (b) any breach or non-observance by the whether for the purposes of this paragraph a person Licensee of any of the terms and conditions has or had control of the Licensee, with the of this Licence; modifications specified in clause 41(4) of this Licence. (c) the bankruptcy of the Licensee; (5) Where two or more persons are the Licensee and any of them is a company, paragraphs (3) and (4) of (d) the making by the Licensee of any this clause shall have effect as if: arrangement or composition with his creditors; (a) sub-paragraph (a) of paragraph (3) were omitted; (e) if the Licensee is a company, the appointment of a receiver or administrator or (b) in sub-paragraph (b) of that paragraph, any liquidation whether compulsory or after the word "of" there were inserted the voluntary; words "any company included among the persons who together constitute"; and (f) any breach or non-observance by the Licensee of the terms and conditions of a (c) for the word "Licensee" in any other Development Scheme; provision of those paragraphs there were substituted the word "company". (g) if the Licensee is a company, the Licensee's ceasing to direct and control either Arbitration — 43.— (1) If at any time any dispute, difference or (i) its operations under the Licence; question shall arise between the Minister and the or Licensee as to any matter arising under or by virtue of this licence or as to their respective rights and liabilities
Page 15 ⒺⓉ Licence P1152
in respect thereof then the same shall, except where it in the case of arbitration in relation to a development is expressly provided by this licence that the matter or scheme, other Licensees affected by that scheme, as thing to which the same relates is to be determined, to his appointment, shall be appointed by the Lord decided, directed, approved or consented to by the Chief Justice of England for the time being. Minister, be referred to arbitration as provided by the following paragraph. (3) In the case of any such arbitration which relates to a development scheme the Licensee shall unless the (2) The arbitration referred to in the foregoing arbitrator otherwise determines perform and observe paragraph shall be in accordance with the Arbitration the terms and conditions of the development scheme Act 1950 by a single arbitrator who, in default of pending the decision of the arbitrator. agreement between the Minister and the Licensee and,
Part 2 – Other restrictions and conditions Note: The acronyms appended to clauses in this Part indicate the author in each case, to whom enquiries are best addressed: “DEFRA” is the Department for the Environment, Food and Regional Affairs and “MoD” is the Ministry of Defence. D – Defence and National Security relationships between the various parties. The setting up of the arrangements shall be the responsibility of Matters [MoD] the Licensee. In particular the Licensee shall: D1 The Licensee shall give the Ministry of (a) consult the organisations which represent Defence six months’ prior notice to any installation the local fishing industry about the sea routes movements within the block. to be used by supply vessels; D2 The Licensee shall give the Ministry of (b)after informing the Secretary of State of Defence six weeks’ prior notice of any seismic survey the result of those consultations, agree with within the block. him which routes shall be used to minimise D3 The Licensee shall, at its own expense, interference with fishing activities without install and maintain underwater sonar beacons to unreasonably increasing transit times; Ministry of Defence specifications on any structures (c) ensure that the agreed routes are used that may be temporarily within the block. There is no unless safety of navigation or security of requirement to fit such beacons to fixed and chartered cargo considerations dictate otherwise; and installations. (d) take all reasonable steps to ensure that a Notes responsible person who is fluent in English is 1 Using powers granted by the Emergency a member of the crew of the supply vessel. Powers Act 1920, the Government may require the F2 The Licensee shall make every effort to Licensee's installations to be moved at very short locate and remove, without unreasonable delay, any notice in times of tension or war. debris resulting from the licensed activities. The 2 The high density of supersonic flying in the Licensee shall consult the relevant fishing area may affect some installations’ operations. organisations on the method of clearance and inform the Secretary of State of the result of those F – Fisheries [DEFRA] consultations. If as a result of that consultation the Secretary of State shall determine that the method of F1 The Licensee shall appoint a fisheries liaison clearance shall be modified, these modifications shall officer and agree suitable arrangements with seismic be observed. survey and supply vessel owners it employs, their masters and the organisations which represent the F3 Claims for damage to or loss of gear or loss local fishing industry, in order to promote good working of fishing time arising from reported debris shall be dealt with promptly by the Licensee.
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Schedule 1 CLAUSE 2
Description of Licensed Area
Block 39/2b is bounded by the following co-ordinates: (1) 55° 53' 00.000"N 3° 16' 00.000"E (2) 55° 53' 00.000"N 3° 22' 16.777"E Thence by a line following the 'Designated Continental Shelf Boundary' as detailed in document 'The Continental Shelf (Designation Of Additional Areas) Order 1965': Reference : SI NO 1531 Publisher : Her Majesty's Stationery Office Type : Statutory Instruments Published : 03-Aug-1965 Printed : 03-Aug-1965 Datum : European Datum 1950 Until co-ordinate: (3) 55° 50' 06.000"N 3° 24' 00.000"E Thence by a line following the 'Designated Continental Shelf Boundary' as detailed in document 'The Continental Shelf (Designation Of Additional Areas) Order 1965': Reference : SI NO 1531 Publisher : Her Majesty's Stationery Office Type : Statutory Instruments Published : 03-Aug-1965 Printed : 03-Aug-1965 Datum : European Datum 1950 Until co-ordinate: (4) 55° 50' 00.000"N 3° 23' 57.453"E (5) 55° 50' 00.000"N 3° 12' 00.000"E (6) 55° 52' 00.000"N 3° 12' 00.000"E (7) 55° 52' 00.000"N 3° 16' 00.000"E (8) 55° 53' 00.000"N 3° 16' 00.000"E The above co-ordinates were specified using 'European Datum 1950'. Block 39/7 is bounded by the following co-ordinates: (1) 55° 50' 00.000"N 3° 12' 00.000"E (2) 55° 50' 00.000"N 3° 23' 57.453"E Thence by a line following the 'Designated Continental Shelf Boundary' as detailed in document 'The Continental Shelf (Designation Of Additional Areas) Order 1965': Reference : SI NO 1531 Publisher : Her Majesty's Stationery Office Type : Statutory Instruments Published : 03-Aug-1965 Printed : 03-Aug-1965 Datum : European Datum 1950 Until co-ordinate: (3) 55° 40' 00.000"N 3° 19' 46.894"E (4) 55° 40' 00.000"N 3° 12' 00.000"E (5) 55° 50' 00.000"N 3° 12' 00.000"E The above co-ordinates were specified using 'European Datum 1950'.
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Schedule 2 CLAUSE 9
Consideration for Licence
Periodic minimum (1) Upon the date mentioned in Clause 3 (“the said date”) or upon the grant of this Licence, payments whichever is the later, and on subsequent anniversaries of the said date during the term of the Licence, the Licensee shall pay the Minister sums (in this Schedule referred to as "periodic payments") calculated as follows: (a) upon the said date, £150 multiplied by the area factor; (b) upon the 1st anniversary of the said date, £150 multiplied by the area factor; (c) ” 2nd ” £150 ” (d) ” 3rd ” £150 ” (e) ” 4th ” £300 ” (f) ” 5th ” £1200 ” (g) ” 6th ” £2100 ” (h) ” 7th ” £3000 ” (i) ” 8th ” £3900 ” (j) ” 9th ” £4800 ” (k) ” 10th ” £5700 ” (l) ” 11th ” £6600 ” (m) upon the 12th and every subsequent anniversary of the said date, £7500 multiplied by the area factor. (2) The payments specified in sub-paragraph (1) above shall be subject to variation in accordance with the following provisions: (a) The periodic payments shall be increased or subsequently reduced in line with movements in the Index of the Price of Crude Oil acquired by Refineries (published in the Digest of UK Energy Statistics) if the Minister so determines. The Minister shall give notice of any such determination ("biennial determination") during the month preceding the eighth anniversary of the date of commencement of this Licence or any subsequent two-yearly anniversary of that date, and shall specify in the notice the increase or reduction in the amount payable. Movements in the Index shall be calculated by reference to a comparison between the arithmetic mean of the Index levels for the two latest calendar years for which figures are available at the time when the determination is made, and the arithmetic mean of the Index levels for 2001 and 2002. In the event that the Index of the Price of Crude Oil acquired by Refineries ceases to be published the Minister may substitute arrangements for redetermination of periodic payments having substantially similar effect to those set out above based on such other comparable Index as he may determine. (b) The increase or reduction specified in a biennial determination shall be payable or take effect on the anniversary of the date of commencement of this Licence next following the date of the relevant determination. (c) No biennial determination shall have effect so as to reduce the periodic payments below the levels set out in sub-paragraph (1) above. (d) The Minister shall not make a biennial determination increasing or reducing the amounts payable where that increase or reduction would be 5% or less of the levels set following the previous biennial determination. (3) In this Schedule “the area factor” means the number of square kilometres comprised in the Licensed Area at the date upon which the periodic payment in question becomes due.
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Schedule 3 CLAUSES 3 AND 16
Work Programme
Firm commitment Within one year of the date set out in clause 3 above, the Licensee shall complete biostratigraphic and geochemical studies on well data from within the Licensed Area. Within two years of the date set out in clause 3 above, the Licensee shall complete: HFI reprocessing; and AVO analysis: on 200km2 of 3D seismic data relating to the Licensed Area. Drill-or-drop commitment Notwithstanding Clause 3 above, this Licence shall expire two years after the date set out in that Clause unless the Licensee has by that date submitted to the Minister an application for consent to drill a well, together with all supporting documentation necessary for the Minister to consider it. If consent is granted, the Licensee shall drill the well before the end of the Initial Term either: to a depth of at least 3050m, or 30m into the Triassic, whichever is the shallower, or to a depth of at least 3350m, or 30m into the Early Carboniferous, whichever is the shallower. Nothing here fetters the Minister’s discretion when considering whether to consent to any specific activity.
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Schedule 4
Companies
EDINBURGH OIL & GAS PLC (registered number: SC005122) of 10 COATES CRESCENT, EDINBURGH, MIDLOTHIAN, EH3 7AL ENCANA (U.K.) LIMITED (registered number: 01051137) of CHARTER PLACE, VINE STREET, UXBRIDGE, MIDDLESEX, UB8 1JG PREMIER OIL EXPLORATION LIMITED (registered number: SC021265) of 4TH FLOOR SALTIRE COURT, 20 CASTLE TERRACE, EDINBURGH, EH1 2EN TULLOW OIL UK LIMITED (registered number: SC090159) of 11 WALKER STREET, EDINBURGH, EH3 7NE
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Execution Page
In witness whereof, these presents typewritten on this and the preceding pages are executed follows:-
THE CORPORATE SEAL OF THE SECRETARY OF STATE FOR TRADE AND INDUSTRY hereunto affixed is authenticated by:
______, an official in the Department of Trade & Industry.
Signed for and on behalf of EDINBURGH OIL & GAS PLC by:
______(full name)______(signature), (Secretary/Director)
______(full name)______(signature), (Director)
Signed for and on behalf of ENCANA (U.K.) LIMITED by:
______(full name)______(signature), (Secretary/Director)
______(full name)______(signature), (Director)
Signed for and on behalf of PREMIER OIL EXPLORATION LIMITED by:
______(full name)______(signature), (Secretary/Director)
______(full name)______(signature), (Director)
Signed for and on behalf of TULLOW OIL UK LIMITED by:
______(full name)______(signature), (Secretary/Director)
______(full name)______(signature), (Director)
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