United Kingdom Government notice concerning European Parliament and Council Directive 94/22/EC of 30 May 1994 on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons

(2001/C 16/02)

(Text with EEA relevance)

DEPARTMENT OF TRADE AND INDUSTRY

THE PETROLEUM (PRODUCTION) (SEAWARD AREAS) REGULATIONS 1988

1. The Secretary of State for Trade and Industry invites interested persons, in accordance with the Petroleum (Production) (Seaward Areas) Regulations 1988 (SI 1988 No 1213), as amended ("the 1988 Regulations"), and the Hydrocarbons Licensing Directive Regulations 1995 (SI 1995 No 1434), to apply for petroleum production licences in respect of blocks 113/28 and 113/29. A map which shows the blocks available for applications has been deposited at the Library at the Department of Trade and Industry, 1 Victoria Street, London, SW1H 0ET. This map may be inspected by prior appointment (tel. (44-207) 215 50 06 or (44-207) 215 50 07, fax (44-207) 215 56 65) between 9.15 and 16.45 hours Monday to Friday until 18 April 2001. The map is also available on the DTI's oil and gas website, http://www.og.dti.gov.uk.

2. Any licence awarded in respect of blocks 113/28 and 113/29 will incorporate in substance, subject to certain modifications and additional provisions to deal with matters referred to below, the model clauses set out in Schedule 4 to the Petroleum (Production) (Seaward Areas) Regulations 1988 (as amended) except that the amendments to model clauses set out in paragraphs (a)(ii) and (c) to (h) of Regulation 8 of the Petroleum (Production) (Seaward Areas) (Amendment) Regulations 1996 will not apply.

APPLICATIONS FOR LICENCES

3. In respect of the blocks referred to in paragraph 1:

(a) applications should be made on the standard application form available from the Department of Trade and Industry; copies of the application form and all other documents referred to in the text of this notice as being available from the Department of Trade and Industry may be obtained from the Licensing Branch, Oil and Gas Directorate, Department of Trade and Industry, 1 Victoria Street, London SW1H 0ET (tel (44-207) 215 51 11 or (44-207) 215 50 32, fax (44-027) 215 51 42). This documentation is also available on the DTI's oil and gas website;

(b) applications should be delivered to the oil and gas Directorate of the Department of Trade and Industry at 1 Victoria Street, London SW1H 0ET, together with a fee of GBP 2820 per application. Applications will be received between 9.30 and 13.00 hours on 18 April 2001. No applications will be accepted after 13.00 hours on that date;

(c) applicants are requested to indicate if they have any preferences between the blocks they have applied for;

(d) applicants are required to provide details of the work programme for the initial term which they intend to carry out if awarded a licence (see paragraph 9 below);

(e) applicants who are also proposed operators are required to submit a statement of their general environmental policy for the conduct of licensed activities in seaward areas;

(f) further guidance on the material with which applicants may support their applications is given in notes for applicants, available from the Department of Trade and Industry;

(g) unless otherwise stated in the notes for applicants, material supplied in support of applications will be treated in confidence; such material will not be disclosed to third parties without the agreement of the applicant, unless it is already in the public domain or disclosure is required by law.

4. Applications will be judged against the background of the continuing need for expeditious, thorough, efficient and safe exploration to identify oil and gas resources of the United Kingdom continental shelf, with due regard to environmental considerations. Applications will be judged on the basis of the following criteria:

(a) the financial capability of the applicant to carry out the activities that would be permitted during the initial term of any licences or licences awarded including the work programme submitted for evaluating the full potential of the area within the relevant block or blocks;

(b) the technical capability of the applicant to carry out the activities that would be permitted during the initial term including the identification of hydrocarbon prospects within the relevant block or blocks. Technical capability will be assessed in part upon the quality of geological analysis related to the block or blocks (taking into account whether work done was innovative);

(c) the way in which the applicant proposes to carry out the activities that would be permitted during the initial term including the quality of the work programme submitted for evaluating the full potential of the area applied for;

(d) where the applicant holds or has held a licence of any description under the Petroleum Act 1998 or previous legislation having similar effect, any lack of efficiency and responsibility displayed by the applicant in operations under that licence.

5. Applicants should note that while authorities representing conservation interests and the interests of other sea users have confirmed that there are no factors for which they have responsibility which preclude the offer for licensing of blocks 113/28 and 113/29, licence awards may be subject to acceptance by the applicant of terms or conditions designed to protect such interests. Information about indicative conditions which may be attached to specific blocks to protect particular interests may be obtained from the Department of Trade and Industry. Details of conditions to be attached to licences additional to those imposed by the Model Clauses set out in the 1988 Regulations will accompany the letter offering the award of a licence. Such conditions will also be incorporated into the main body of the licence.

6. Following examination of all applications in respect of the blocks referred to in paragraph 1, the Secretary of State will select the applicants to whom he is prepared to award licences. Applicants to whom the Secretary of State is prepared to award a licence will be notified no later than one year after the receipt of applications.

7. Unsuccessful applicants will be notified in writing. An applicant will be notified of the reasons for the Secretary of State's decision if he submits a written request for this information to be provided.

8. In all cases where the Secretary of State is prepared to award a licence, it will be offered on the condition that, within 28 days of the date on which the Secretary of State makes the offer, the applicant:

(a) confirms in writing his acceptance of a work programme proposed by the Secretary of State following discussion with the applicant;

(b) remits to the Secretary of State the appropriate consideration referred to in paragraph 11(a) below for the licence; and

(c) confirms in writing his acceptance of any special conditions with which he has been asked to comply.

LICENCE TERM AND CONSIDERATION PAYABLE

9. Subject as below, licences issued in respect of the blocks referred to in paragraph 1 will have an initial term of six years with an option to extend for a second term of 12 years. This second term may be extended beyond 12 years for a further period of 18 years.

10. The option to continue the licence into the second term may be exercised by the licensee giving notice in writing to this effect not less than three months before the expiration of the initial term. The licensee will in exercising this option be required to surrender part of the licensed area except where the area consists of less than 30 sections (a "section" being defined as a part of a block comprising an area bounded by minute lines of longitude and latitude one minute apart respectively). Where a part is required to be surrendered, it should be calculated as follows:

(i) if the area originally comprised in the licence consisted of 60 or more sections, the part to be surrendered should be not less than half the number of such sections; or

(ii) if the area originally comprised in the licence consisted of more than 30 but fewer than 60 sections, the part to be surrendered should be such number as will leave a continuing part consisting of 30 sections.

Any area to be surrendered must comply with Model Clause 8 in Schedule 4 to the 1988 Regulations as it stood prior to the amendments made to it by the Petroleum (Production) (Seaward Areas) (Amendment) Regulations 1996 and must be described in the said notice.

11. The consideration required in respect of production licences granted as a result of this invitation will in summary be:

(a) an initial payment, at the time the offer of a licence is accepted, of GBP 410 for each square kilometre comprised in the licensed area;

(b) subsequent annual payments commencing on the sixth anniversary of the date of commencement of the licence term (following exercise of the option to hold the licence for a second term) when the sum of GBP 470 will be payable for each square kilometre in the area to which the licence then relates and rising by annual increments of GBP 470 until an annual sum of GBP 7050 is payable for each square kilometre comprised in the licence area, subject to biennial review 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 Secretary of State so determines. The Secretary of State will not make a biennial determination increasing or decreasing the annual payments due unless the determination will result in the payment set being over 5 % higher or lower than that set by the previous determination, or in the case of the first biennial determination, over 5 % higher than GBP 7050 for each square kilometre. Further details concerning the payments due are available from the Department of Trade and Industry;

(c) a royalty at the rate of 12,5 % payable in respect of petroleum won and saved from any field part of which received development consent prior to 1 April 1982.