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"mine" has the same meaning as in the Mines and Quarries Act 1954[75];

"the Minister" means the Secretary of State for Trade and Industry.

    (2) Any obligations which are to be observed and performed by the Licensee shall at any time at which the Licensee is more than one person be joint and several obligations.

Term of licence
     3. This licence unless sooner determined under any of the provisions hereof shall be and continue in force for the term of twenty-five years after .................. 19....

Right of Licensee to determine licence
     4. Without prejudice to any obligation or liability imposed by or incurred under the terms and conditions hereof the Licensee may at any time during the term hereby granted determine this licence by giving to the Minister not less than one month's previous notice in writing to that effect.

Payment of consideration for licence
     5.  - (1) The Licensee shall pay to the Minister during the term of this licence the consideration for the grant of this licence specified in the Schedule to this licence at the times and in the manner so specified.

    (2) The Licensee shall not by reason of the determination of this licence be entitled to be repaid or allowed any part of any sum payable to the Minister pursuant to this licence.

Records
     6. The Licensee shall keep and furnish to the Minister such records relating to the operations conducted in the licensed area under this licence, the result thereof and the disposal of any natural gas won and saved as the Minister may from time to time determine.

Power to inspect accounts, etc.
     7. Any person authorised by the Minister may at all reasonable times enter into and upon any land for the time being possessed or occupied by the Licensee in the licensed area and inspect and make abstracts or copies of any records or accounts which the Licensee is required to keep or make in accordance with the provisions of this licence.

Records to be treated as confidential
     8. All records, accounts and information which the Licensee is or may be from time to time required to furnish under the provisions of this licence shall be supplied at the expense of the Licensee and shall not (except with the consent in writing of the Licensee which shall not be unreasonably withheld) be disclosed to any person not in the service or employment of the Crown. The Minister shall nevertheless be entitled at any time to make use of any information received from the Licensee for the purpose of preparing and publishing such returns and reports as may be required of the Minister by law.

Notice of commencement and termination of operations
     9. As soon as the Licensee has decided to get natural gas at any place he shall notify the Minister in writing of the situation thereof stating - 

(a) the name of the mine for the safety of which the operations are to be undertaken;

(b) whether such mine is a disused mine or not.

The Licensee shall also give to the Minister notice in writing of the termination of any such operations within one month of the date of termination.

Indemnity against third party claims
     10. The Licensee shall at all times keep the Minister effectually indemnified against all actions, proceedings, costs, charges, claims and demands whatsoever which may be made or brought against the Minister by any third party in relation to or in connection with this licence or any matter or thing done or purported to be done in pursuance thereof.

Agreement not to assign
     11. The Licensee shall not without the consent of the Minister in writing assign or part with any of the rights granted by this licence in relation to the whole or any part of the licensed area or grant any sub-licence in respect of any of such rights.

Power of revocation
     12. If there shall be any breach or non-observance by the Licensee of any of the terms and conditions herein contained the Minister may revoke this licence and thereupon the same and all the rights hereby granted shall cease and determine but subject nevertheless and without prejudice to any obligation or liability imposed by or incurred under the terms and conditions hereof.

Arbitration
     13.  - (1) If at any time any dispute, difference or question shall arise between the Minister and the Licensee as to any matter arising under or by virtue of this licence or as to their respective rights and liabilities in respect thereof then the same shall, except where it is expressly provided by this licence that the matter or thing to which the same relates is to be determined or consented to by the Minister, be referred to arbitration as provided by the following paragraph.

    (2) The arbitration referred to in the foregoing paragraph shall be by a single arbitrator who, in default of agreement between the Minister and the Licensee as to his appointment, shall be appointed by the Lord Chief Justice of England for the time being.

"the Act of 1934" means the Petroleum (Production) Act 1934[79];

"the Act of 1964" means the Continental Shelf Act 1964[80];

"the Act of 1998" means the Petroleum Act 1998[81];

"block" means an area delineated on the reference map deposited at the principal office of the Minister's department;

"development scheme" has the meaning assigned thereto by clause 24;

"half year" means the period from 1st January to 30th June in any year and the period from 1st July to 31st December in any year;

"the licensed area" means the area for the time being in which the Licensee may exercise the rights granted by this licence;

"the Licensee" means the person or persons to whom this licence is granted, his personal representatives and any person or persons to whom the rights conferred by this licence may lawfully have been assigned;

"the Minister" means the Secretary of State for Trade and Industry;

"petroleum" includes any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata, but does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation;

"well" includes borehole.

    (2) Any obligations which are to be observed and performed by the Licensee shall at any time at which the Licensee is more than one person be joint and several obligations.

    (3) Any clause of this licence which refers to any provision of Part I of the Oil Taxation Act 1975[82] shall, unless the contrary intention appears, be construed as referring to that provision as it has effect for the time being for the purposes of petroleum revenue tax.

Term of licence
     3. This licence unless sooner determined under any of the provisions hereof shall be and continue in force for the term of twenty years next after .................. 19..., but if the terms and conditions hereof are duly performed and observed it may be continued for a further period or periods under clause 4.

Extension or further extension of term
     4. The Minister, on application being made to him in writing prior to the final year of the term or any extension thereof, may grant an extension or further extension of this licence. If granted, the extension or further extension shall be for such period as the Minister may determine.

Right of Licensee to determine licence or surrender part of licensed area
     5.  - (1) Without prejudice to any obligation or liability imposed by or incurred under the terms and conditions hereof, the Licensee may, at any time, determine this licence or surrender any such part of the licensed area as is mentioned in paragraph (3) of this clause by giving six months' written notice to that effect to the Minister.

    (2) A notice given pursuant to paragraph (1) of this clause may be cancelled by a further notice in writing given to the Minister not less than one month before the expiration of the notice.

    (3) Any area to be surrendered in accordance with paragraph (1) of this clause shall be a clearly defined area whose surrender will leave a retained area - 

(a) which comprises at least 20 square kilometres;

(b) the boundaries of which run north, south, east and west; and

(c) the shortest boundary of which extends for at least 2 kilometres;

Provided that if the licensed area is contiguous to an area which is comprised in a licence granted under - 

(i) the Act of 1934, or

(ii) Part I of the Act of 1998,



the boundaries of which do not coincide with the grid marked on the reference map deposited at the principal office of the Minister's department or is bounded by a line drawn in accordance with the provisions of Schedule 1 to the Petroleum (Production) (Landward Areas) Regulations 1984 the Minister may agree in writing prior to the date the appropriate notice is given by the Licensee to accept a surrender of part of the licensed area which does not comply with the requirements of this paragraph.

Consequences of determination or surrender by Licensee
     6. Upon the date on which any determination of this licence by the Licensee or any surrender of a part of the licensed area is to take effect, the rights granted by this licence shall cease or cease in respect of the part so surrendered as the case may be but without prejudice to any obligation or liability imposed upon the Licensee or incurred by him under the terms and conditions of this licence prior to that date.

Payment of consideration for licence
     7.  - (1) The Licensee shall make to the Minister as consideration for the grant of this licence - 

(a) payments of royalty in accordance with clauses 8 and 9 of this licence;

(b) deliveries of petroleum in accordance with clause 10 of this licence; and

(c) payments in accordance with Schedule 2 to this licence.

    (2) The Licensee shall not by reason of the determination of this licence or the surrender of any part of the licensed area be entitled to be repaid or allowed any sum payable to the Minister hereunder before the date of the determination or surrender.

Royalty payments
     8.  - (1) Subject to paragraph (1A) of this clause the Licensee shall pay to the Minister, in respect of each chargeable period, a royalty equal to the sum of the percentages specified in Schedule 3 to this licence of the value of the relevant units won and saved in the year which includes that period, and for the purposes of this paragraph "relevant unit" means a unit won and saved in the chargeable period in question and the value of a relevant unit is the amount produced by dividing the value of the petroleum relating to that period by the number of the relevant units.

    (1A) Paragraph (1) of this clause shall not apply to a chargeable period in which the Licensee delivers petroleum to the Minister in pursuance of clause 10 of this licence; but if the petroleum delivered has a value of less than the relevant percentage of the aggregate of - 

(a) the value of the petroleum delivered (ignoring any such excess as is mentioned in paragraph (6D) of this clause), and

(b) the value of the petroleum relating to that period,

he shall pay to the Minister a royalty of an amount equal to the difference.

    (5) For the purposes of this clause and clauses 8A and 9 of this licence the value of the petroleum relating to a chargeable period is, subject to paragraph (6) of this clause, the total of the amounts which, if the words "one-half of" were omitted from paragraph (b) of subsection (4) and paragraph (d) of subsection (5) of section 2 of the Oil Taxation Act 1975[83], would in pursuance of paragraph (a) of the said subsection (4) fall to be taken into account in relation to that period in respect of the persons who by reference to this licence are or are treated as participators for the purposes of those subsections, reduced by the total of the market values which would in pursuance of the said paragraph (b) fall to be taken into account as aforesaid.

    (6) The value which, in pursuance of paragraph (5) of this clause, is the value of the petroleum relating to a chargeable period shall be increased by an amount equal to the value, as determined for the purposes of income tax or the charge of corporation tax on income, of so much of the petroleum won and saved in the licensed area as falls within section 10(1) of the Oil Taxation Act 1975 and was in that period disposed of or relevantly appropriated (within the meaning of Part I of that Act) by the persons mentioned in the said paragraph (5).

    (6A) Subject to paragraphs (6B) and (6C) of this clause, the value of petroleum delivered to the Minister in pursuance of clause 10 of this licence shall be ascertained for the purposes of this clause and clause 8A on such basis (or, where petroleum of more than one kind is delivered, such bases) as the Minister and the Licensee agree.

    (6B) If the Minister and the Licensee fail to agree on the value of any petroleum delivered to the Minister in pursuance of clause 10 of this licence, it shall be ascertained on such basis as the Minister may specify as fair in a notice in writing given by him to the Licensee.

    (6C) The Licensee may, during the period of 28 days beginning with the day on which he receives a notice from the Minister under paragraph (6B) of this clause, refer to arbitration in the manner provided by clause 37 of this licence any question as to whether the basis of valuation specified in the notice is fair.

    (6D) In this clause and clauses 8A and 9, references to petroleum delivered to the Minister in pursuance of clause 10 include references to any excess over the quantity required to be delivered by a notice served in pursuance of paragraph (1) of that clause.

    (7) In this clause - 

"chargeable period" means a half year in which this licence is in force;

"relevant percentage", in relation to a chargeable period, means the effective rate at which, apart from any notice under clause 11 of this licence, royalty would be payable for that period in pursuance of paragraph (1) of this clause;

"unit" means one tonne of petroleum won and saved in the licensed area except that in the case of petroleum so won and saved in the form of gas it means a quantity of it equal to 1,115 cubic metres of the gas at a temperature of 15 degrees Celsius and a pressure of 1.0132 bar; and

"year" means a year consisting of a chargeable period in which such a periodic payment as is mentioned in Schedule 2 to this licence is payable and the following chargeable period.

Payments by the Minister
     8A.  - (1) If in any chargeable period the Licensee delivers to the Minister in pursuance of clause 10 of this licence petroleum having a value greater than the relevant percentage of the aggregate of - 

(a) the value of the petroleum delivered (ignoring any such excess as is mentioned in clause 8(6D) of this licence), and

(b) the value of the petroleum relating to that period,

the Minister shall pay to the Licensee a sum equal to the difference.

    (2) In this clause, "chargeable period" and "relevant percentage" have the same meanings as in clause 8 of this licence.

[73] 1988 c.1.back

[74] S.I. 1982/1000.back

[75] 1954 c.70; section 180 (meaning of "mine" and "quarry") was modified by Part II of Schedule 3 to the Management and Administration of Safety and Health at Mines Regulations 1993 (S.I. 1993/1897).back

[76] S.I. 1984/1832.back

[77] 1987 c.12.back

[78] 1989 c.1; modified by paragraph 8 of Schedule 3 to the Petroleum Act 1998 (c.17).back

[79] 1934 c.36.back

[80] 1964 c.29.back

[81] 1998 c.17.back

[82] 1975 c.27.back