PP/29/01PD/ST0701.PPT

The relevant model clause in force before 1976 contained no power for the Secretary of State to require any work to be carried out in addition to that prescribed in the licence.

Changes made in 1976 mean that after the initial term the Secretary of State may, under clause 16(2) (in the 1988 numbering), require an exploration programme of a kind which a licensee seeking to exploit the licence to the best commercial advantage could reasonably be expected to carry out in the specified period, assuming it had the requisite competence and resources.

The requirement is a potentially onerous burden since the test is made separately in respect of each licence and without regard to the global calls on the resources of particular licensees or on the timing considerations which the holder of multiple licences would normally take into account in determining any work programme.

The relevant model clause in force before 1976 contained no power for the Secretary of State to require any work to be carried out in addition to that prescribed in the licence.

Changes made in 1976 mean that after the initial term the Secretary of State may, under clause 16(2) (in the 1988 numbering), require an exploration programme of a kind which a licensee seeking to exploit the licence to the best commercial advantage could reasonably be expected to carry out in the specified period, assuming it had the requisite competence and resources.

The requirement is a potentially onerous burden since the test is made separately in respect of each licence and without regard to the global calls on the resources of particular licensees or on the timing considerations which the holder of multiple licences would normally take into account in determining any work programme.

1. Exploration

PP/29/01PD/ST0701.PPT

2. Development

On request by the Secretary of State, the licensee must submit a detailed development programme.

The Secretary of State may reject the programme either on the grounds:

that it is contrary to good oilfield practice (which can be arbitrated),

or

that the licensee's proposals are not in the national interest, which cannot be arbitrated.

2. Development

On request by the Secretary of State, the licensee must submit a detailed development programme.

The Secretary of State may reject the programme either on the grounds:

that it is contrary to good oilfield practice (which can be arbitrated),

or

that the licensee's proposals are not in the national interest, which cannot be arbitrated.

PP/29/01PD/ST0701.PPT

3. Sanctions

Breach of requirements relating to development programmes is

generally grounds for revocation of the licence, provided, in the case

of the requirement to carry out works, that the licensee has had a

reasonable time to do so. Alternatively, where the breach consists of

a failure on the part of a licensee to prepare and submit a

development programme, the Secretary of State may impose his own

by serving a programme as he considers that the licensee should have

submitted.

3. Sanctions

Breach of requirements relating to development programmes is

generally grounds for revocation of the licence, provided, in the case

of the requirement to carry out works, that the licensee has had a

reasonable time to do so. Alternatively, where the breach consists of

a failure on the part of a licensee to prepare and submit a

development programme, the Secretary of State may impose his own

by serving a programme as he considers that the licensee should have

submitted.