United Kingdom Government notice concerning European Parliament and Council Directive 94/22/EEC of 30 May 1994 on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons (Text with EEA relevance)
Date: 2003-02-05
Institutions: United Kingdom
Subjects: United Kingdom, energy site, exploitation of resources, gas industry, hydrocarbon, patents licence, petroleum exploration

5.2.2003

EN

Official Journal of the European Union

C 27/3

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

(2003/C 27/03)

(Text with EEA relevance)

ANNOUNCEMENT OF UNITED KINGDOM ONSHORE AND OFFSHORE OIL AND GAS LICENSING ROUND

DEPARTMENT OF TRADE AND INDUSTRY

OFFSHORE (SEAWARD)

THE PETROLEUM (PRODUCTION) (SEAWARD AREAS) REGULATIONS 1988

in accordance with the

The Secretary of State for Trade and Industry invites
1.
interested persons,
Petroleum
(Production) (Seaward Areas) Regulations 1988 (SI 1988 No
1213), as amended (the 1988 Regulations), and the Hydro-
carbons Licensing Directive Regulations 1995 (SI 1995 No
1434), to apply for Seaward Production Licences (referred to
below as Traditional Licences) and Promotional Seaward
Production Licences (referred to below as Promote Licences)
in respect of those blocks and parts of blocks that are not
subject to an existing petroleum production licence on the
date of this Notice in the areas shown on maps deposited at
the Department of Trade and Industry Library, where they can
be viewed by prior appointment (see below for contact details)
between 9.15 and 16.45, Monday to Friday, until 8 May 2003.
They are also available on the DTI's oil and gas website
(www.og.dti.gov.uk). This is the United Kingdom Continental
Shelf (UKCS) 21st round of licensing.

APPLICATIONS FOR LICENCES

to a

significant work programme

4.
Applications must be made on the Application Form for
Seaward Production Licences, which is available on the DTI's
oil and gas website or from the Licensing and Consents Unit
Licence Administration (see below for contact details). There
will be two options for each applicant: a traditional application
or a promoter's application. The traditional application is
aimed at companies who have the necessary resources to
commit
from the
commencement of the licence. Those applicants wishing to
bid a firm or contingent well should apply for a traditional
licence. The promoter's option is aimed at companies that at
present lack the organisational or financial resources to carry
out the kind of work traditionally associated with an initial
Term Work Programme but have the skills to develop viable
drilling prospects and who propose to attract the interest of
other companies or assurance of resources during the initial
term. The DTI will consider a promoter's capability and plans
to attract such interest as well as purely technical aspects of the
Work Programme.

to this invitation will

Licences issued pursuant

in Schedule 4 to the Petroleum (Production)
except

2.
incor-
porate clauses based substantially, subject to certain modifi-
cations and additional provisions, on the model clauses set
(Seaward
out
Areas) Regulations 1988 (as
the
that
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 (SI 1996 No
2946) will not apply). With effect from 1 January 2003 royalty
consideration is abolished and the clauses will be amended as
appropriate.

amended,

application for

5.
All applications, both traditional and promoter, must be
delivered to the Department of Trade and Industry at 1 Victoria
Street, London SW1H 0ET, United Kingdom, together with a
traditional
fee of GBP 2 820 per
application(s) and a fee of GBP 2 820 per application for
applications under promoter terms up to the limits set out in
point 7. Applications will be received between 9.30 and 13.00
on 7 of May 2003 for Traditional Licence applications and
between 9.30 and 13.00 on 8 May 2003 for promoter
applications. No applications will be accepted after 13.00 on
these dates.

the

The DTI has

3.
conducted a Strategic Environmental
Assessment of the areas available to the standard required in
Directive 2001/42/EC on the Assessment of
the Effects of
Certain Plans and Programmes on the Environment. The
conclusion of the Assessment was that there are no overriding
reasons why this area should not be considered for oil and gas
licensing. Details of
the Assessment, and instructions for
obtaining copies, may be obtained from the website
http://www.habitats-directive.org/sea2/index.cgi

6.
All 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 environ-
mental considerations.

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Official Journal of the European Union

5.2.2003

7. When applying for more than one block, applicants
should indicate an order of preference for their applications
under traditional terms and for applications under promoter
terms. Under promoter terms companies will be limited to a
maximum of five contiguous blocks or part-blocks for any
given play concept, up to a maximum of 10 blocks in total
for any one company.

Further guidance on the material with which applicants
8.
may support
for
Applicants’, available from the Licence Administration and on
the DTI's oil and gas website (see below for contact details).

is given in ‘Notes

applications

their

Traditional applications

Applications will be judged on the basis of the following

9.
criteria:

(a) the financial capability of the applicant to carry out the

agreed Initial Term Work Programme;

(b) the technical capability of the applicant to carry out the
agreed Initial Term Work Programme, and as appropriate
any other activities permitted under the Licence (taking into
account the quality of geotechnical analysis and degree of
innovation);

(c) any lack of activity, efficiency or responsibility displayed by
the applicant under any other licence of any description
issued under the Petroleum Act 1998 or previous legis-
lation having similar effect.

The proposed operator within each applicant group
is the sole applicant) must
its general environmental policy for

10.
(including any company that
submit a statement of
the conduct of licensed activities in seaward areas.

Promote applications

Applications will be judged on the basis of the following

11.
criteria:

(a) the technical and innovative capability of the applicant to
carry out the agreed Work Programme to establish a viable
drilling prospect during the first two years of the licence,
and where relevant, any other activities permitted under the
Licence (taking into account the quality of geotechnical
analysis and degree of innovation);

(b) the quality of the applicant's approach to securing the
additional financial and technical resources that would be
needed to complete the substantive work programme
contemplated in the second two years of the Initial Term;

(c) any lack of activity, efficiency or responsibility displayed by
the applicant under any other licence of any description
issued under the Petroleum Act 1998 or previous legis-
lation having similar effect.

12.
Following consideration of all applications, the Secretary
of State will notify all applicants in writing of his decisions. In
all cases where the Secretary of State is prepared to award a
licence, DTI will prepare a draft licence and send it to the
successful applicant, who will
then have the option of
accepting it by returning it to DTI signed by all members of
the applicant group. An unsuccessful 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.

The Government accepts no liability for any costs
in considering or making its

13.
incurred by the applicant
application.

LICENCE TERM AND PAYMENTS

14.
Subject as below, both a traditional and a promote
licence will have an initial term of four years, with options
to extend for a four-year second term and an 18-year third
term.

15.
The promoter option will offer the licensee the oppor-
tunity to assess and promote the prospectivity of the licensed
acreage. However, in order to continue beyond the first two
years of the initial term, the licensee will be required to submit
a report, to the Department at any point within the first two
years. This
report will outline the research and analysis
undertaken and include a request to retain the licence into
the third and fourth year with a commitment
that will
include the drilling of at least one well, or the conduct of an
equivalent agreed substantive activity, by the end of the initial
term (i.e. by the end of year four). The ability of the licensee to
secure financial resources and the environmental and technical
expertise to carry out the agreed commitment will need to be
demonstrated to the DTI's satisfaction at
the point of this
In the event of failure of the licensee to convince
request.
lapse. Alter-
the DTI of these requirements, the licence will
natively the licensee can request
the
licence at any point during the first two years on the basis
that the licensee sees little or no prospectivity on the acreage.
Moreover if no report is received by the Department from the
licensee to either effect by the end of the two year period, the
licence will automatically expire.

the termination of

The Licensee

16.
(both traditional and promoter) can
exercise the option to continue the licence into the second
term provided that he gives notice to that effect not
less
than three months before the initial
term expires, and
provided that he has
first completed the agreed Work
Programme and surrendered part of the licensed area. The
maximum area that may be retained is:

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Official Journal of the European Union

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(a) not more than half the original number of sections covered
by the licence if the licence originally covered 60 or more
sections; or

(b) 30 sections if the licence originally covered more than 30

but fewer than 60 sections.

17.
The retained area 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.

A ‘section’ is part of a block comprising an area bounded by
lines of longitude and latitude one minute apart respectively.

The Licensee

(both traditional and promoter) can
18.
exercise the option to continue the licence into the third
term provided that he gives notice to that effect not
less
than three months before the second term expires, and only
in respect of acreage that is the subject of an approved Devel-
opment Plan at that time.

19.
Any licence granted as a result of this invitation will be
subject to payment of consideration according to provisions set
out in the model clauses and in schedules to the Licence, in
summary:

— Traditional licences

(a)

four annual payments, beginning at the commencement
of the Licence, of GBP 150 for each square kilometre
that it covers at the anniversary of its coming into
force;

(b) a subsequent annual payment of GBP 300 for each
square kilometre covered, rising by annual increments
of GBP 900 to a maximum of GBP 7 500 per square
kilometre (this payment is 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); and

— Promote licences

(c) as for traditional applications, except that payments will
be reduced by 90 % for the first two years of the licence
only.

ONSHORE (LANDWARD)

THE PETROLEUM (PRODUCTION) (LANDWARD AREAS)
REGULATIONS 1995

in accordance with the

The Secretary of State for Trade and Industry invites
20.
interested persons,
Petroleum
(Production) (Landward Areas) Regulations 1995 (SI 1995 No
1436 ) and the Hydrocarbons Licensing Directive Regulations
1995 (SI 1995 No 1434), to apply for Petroleum Exploration
and Development Licences in respect of the blocks coloured

yellow on maps deposited at the Library at the Department of
Trade and Industry, 1 Victoria Street, London, SW1H 0ET.
These maps, may be inspected by prior appointment
(Tel.
(44-207) 215 50 06, fax (44-207) 215 56 65) between 9.15
a.m. and 16.45. Monday to Friday until 7 May 2003. The
maps are also available on the DTI's oil and gas website,
http://www.og.dti.gov.uk. This is the 11th round of landward
licensing.

APPLICATIONS FOR LICENCES

In respect of all blocks referred to in paragraph 20

21.
above:

from the Department of Trade

(a) applications should be made on a standard application
and
form available
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, Exploration and Devel-
opment Branch, Oil and Gas Directorate, Department of
Trade and Industry, 1 Victoria Street, London, SW1H 0ET
(Tel.
fax
(44-207) 215 51 42); This documentation is also available
on the DTI's oil and gas web site, http://www.og.dti.gov.uk;

(44-207) 215 51 11 or

(44-207) 215 50 32,

(b) applications should be delivered to the Oil and Gas Direc-
torate of
the Department of Trade and Industry at 1
Victoria Street, London, SW1H 0ET between 9.30 and
13.00 on 7 May 2003 together with a fee of GBP 1 000
per application. No applications will be accepted after
13.00 on 7 May 2003,

(c) applicants are requested to indicate where possible any
preferences they have as between the blocks they have
applied for, and should indicate if any of
the blocks
applied for are alternatives;

(d) applicants are required to provide details of

the work
term which they intend to

programme for the initial
carry out if awarded a licence.

(e)

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 or
and gas web site,
http://www.og.dti.gov.uk

from the DTI's oil

22.
Applications will be judged against the background of
the continuing need for expeditious, thorough, efficient and
safe exploration to identify oil and gas resources within the
mainland of Great Britain. 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 under the licence during
the initial term including the work programme submitted
for evaluating the full potential of the area within the block
or blocks applied for;

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Official Journal of the European Union

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(b) the technical capability of

the applicant

that would be permitted under

to carry out
activities
the licence
during the initial term including the identification of hydro-
carbon prospects within the block or blocks applied for.
The technical capabilities will be assessed in part upon the
quality of geological analysis related to the block or blocks
applied for,
(including taking into account whether the
technical work already done or proposed is innovative);

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

treated as having been granted under

(d) where the applicant holds or has held a licence granted
under or
the
Petroleum Act 1998, any lack of efficiency and responsi-
bility displayed by the applicant in operations under that
licence.

23.
Following examination of all applications in respect of
the blocks referred to in point 20, 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
licences will be notified within a period of
six months
commencing on 7 May 2003.

24.
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
this
information to be provided.

for

25.
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 all the terms of the
licence and a work programme proposed by the Secretary
of State following discussion with the applicant; and

(b) remits

to

the

appropriate
consideration referred to in point 27(a) below for the
licence.

Secretary

State

the

of

LICENCE TERM AND CONSIDERATION PAYABLE

Licences issued in respect of the blocks referred to in
26.
point 20 will incorporate clauses based on the model clauses
set out in Schedule 3 to the Petroleum (Production) (Landward
Areas) Regulations 1995. Licences will have an initial term of
six years and a second term of five years. A licence may be
extended after the expiry of the second term for a further
period of 20 years.

27.
The consideration required in respect of petroleum
exploration and development licences granted as a result of
this invitation will be:

(a) an initial payment, at the time the offer of a licence is
accepted, of GBP 25 for each square kilometre comprised
in the licensed area;

(b) on the first, second, third, fourth and fifth anniversaries of
the date of commencement of the licence term, the sum of
GBP 25 will be payable for each square kilometre in the
area to which the licence then relates;

(c) on the sixth and subsequent anniversaries of the date of
commencement of the licence term, payments calculated by
reference to the number of square kilometres in the area to
which the licence then relates and 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. Further details concerning the payments due
are available from the Department of Trade and Industry.

GENERAL

CONFIDENTIALITY

28. Material supplied in support of applications will be
treated in accordance with the Code of Practice on Access to
Government Information.

EXCEPTIONS

29.
The terms, provisions, payments and other details
relating to each licence will normally be as set out above,
but the Secretary of State reserves the right to amend them
in some cases to fit particular circumstances (e.g. licences that
cover decommissioned fields).

APPLICATION DATES

Seaward Production Licences (‘Traditional Licences’). Between
9.30 and 13.00 on 7 May 2003.

Landward Petroleum Exploration and Development Licences.
Between 9.30 . and 13.00 on 7 May 2003.

Promotional Seaward Production Licences (‘Promote Licences’).
Between 9.30 and 13.00 on 8 May 2003.

CONTACT DETAILS

Licence Administration: Oil and Gas Directorate, Department
of Trade and Industry, 1 Victoria Street, London SW1H 0ET
(Tel. (44-207) 215 51 11, fax (44-207) 215 50 70).

Department of Trade and Industry Library: 1 Victoria
Street, London SW1H 0ET (Tel.
fax
(44-207) 215 56 65)

(44-207) 215 50 06/7,

Oil & Gas Directorate's website: www.og.dti.gov.uk