Citation and commencement

1.  These Regulations may be cited as the Petroleum Licensing (Applications) Regulations 2015, and come into force on 30th June 2015.

Interpretation

2.  In these Regulations-

"application notice" means a notice published in the Official Journal of the European Union which-

"block" means an area to which a reference number has been assigned and published on a web site by the Department of Energy and Climate Change;

"landward area" means an area which lies on the landward side of the lines drawn in accordance with the provisions of Schedule 1, no part of which is part of Northern Ireland;

"landward petroleum exploration licence" means a licence to search for petroleum in a landward area;

"low water line" has the meaning given by paragraph 8 of Schedule 1;

"methane drainage licence" means a licence to get natural gas in the course of operations for making and keeping safe mines whether or not disused;

"model clauses" in relation to a licence means the model clauses prescribed under section 4(1)(e) of the Petroleum Act 1998 to be incorporated in licences of that type;

"petroleum exploration and development licence" means a licence to search and bore for, and get, petroleum in a landward area;

"promote licence" means a seaward area production licence in which, in accordance with the model clauses or clauses having a similar effect-

"seaward area" means-

"seaward petroleum exploration licence" means a licence to search for petroleum in any seaward area or landward area below the low water line;

"seaward area production licence" means a licence to search and bore for, and get, petroleum in a seaward area;

"work programme" means a scheme of prospecting including any geological survey by any physical or chemical means and any test drilling.

Application of the Regulations

3.-(1) These Regulations apply to an application for-

(a)a landward petroleum exploration licence;

(b)a seaward petroleum exploration licence;

(c)a methane drainage licence;

(d)a petroleum exploration and development licence; and

(e)a seaward area production licence.

(2) The following Regulations cease to have effect, to the extent specified, in relation to an application for a licence mentioned in paragraph (1) made after the date of coming into force of these Regulations-

(a)the whole of the Petroleum (Production) (Seaward Areas) Regulations 1988(3);

(b)the Petroleum (Production) (Landward Areas) Regulations 1995(4) with the exception of-

(i)regulation 9(2)(c); and

(ii)Schedule 5 to the Regulations.

Applications for licences: general

4.-(1) Applications may be made by any person.

(2) Applications must-

(a)in the case of an application for-

(i)a petroleum exploration and development licence or

(ii)a seaward area production licence,

be made via the portal provided by the Department of Energy and Climate Change for the purpose of licence applications on a publicly accessible web site;

(b)in the case of an application for a licence other than those mentioned in sub-paragraph (a), be made in writing;

(c)be accompanied by such evidence and particulars or documents in support as are specified in these Regulations in respect of the licence being applied for, and are appropriate to that application;

(d)be accompanied by the appropriate fee, as set out in regulation 7.

(3) In respect of an application for a petroleum exploration and development licence, regulation 5(2)(b), (5) and Schedule 2 sets out the information and supporting documentation required.

(4) In respect of an application for a seaward area production licence, regulation 5(2)(b), (5) and Schedules 2 and 3 set out the information and supporting documentation required.

(5) An application for a licence other than a petroleum exploration and development licence or a seaward area production licence may be made at any time.

(6) If any of the matters stated in an application or any further information supplied by the applicant changes after the application is made or after the information is supplied but before a licence is granted or the Secretary of State informs the applicant that the application is refused, the applicant must immediately give notice in writing to the Secretary of State giving particulars of the change.

(7) Nothing in these Regulations prevents more than one application being made by the same applicant or more than one licence being granted to that applicant.

(8) In this regulation, "in writing" includes transmission by way of an email sent to an address provided by the Secretary of State for the purpose of receiving applications for licences and related information.

Applications for a petroleum exploration and development licence or a seaward area production licence

5.-(1) This regulation applies to an application for-

(a)a petroleum exploration and development licence; or

(b)a seaward area production licence.

(2) Subject to paragraph (6), every application for a licence must-

(a)be in response to an application notice, and

(b)specify the block or blocks to which it relates.

(3) Subject to paragraph (4), the application notice mentioned in paragraph (2) must provide for applications relating to any of the blocks to be made and determined in competition with others, specifying-

(a)a date on or before which any such applications are to be made, being a date at least 90 days after the date on which the application notice is published; and

(b)a date on which, or a period within which, it is proposed that licences will be granted to successful applicants.

(4) In the case of any block in respect of which-

(a)provision for competing applications was made on a previous occasion in an application notice, and

(b)that provision did not result in the grant of a licence,

the application notice may provide for applications to be made and determined at any time.

(5) If an application specifies more than one block it may indicate an order of preference for some or all of the blocks and it may indicate that blocks are applied for as alternatives.

(6) Where the Secretary of State decides that geological or production considerations justify the granting of a licence in respect of any area to the holder of a licence in respect of a contiguous area, and notifies the holders of licences in respect of areas contiguous to the area in question accordingly, any of them may apply for a licence in respect of the area in question within whatever period the Secretary of State considers sufficient for this purpose and specifies in the notification.

Applications for landward petroleum exploration licences, seaward petroleum exploration licences and methane drainage licences

6.  An application for-

(a)a landward petroleum exploration licence,

(b)a seaward petroleum exploration licence, or

(c)a methane drainage licence,

must include in respect of each applicant-

(i)the applicant's name in full;

(ii)where the applicant is a body corporate-

(aa)its place of incorporation; and

(bb)its registration number at Companies House or other appropriate registration number or identifier, or if it is registered in another jurisdiction, its registration number or other identifier from that jurisdiction;

(iii)where the applicant is an individual, the applicant's usual residential address, otherwise-

(aa)the address of the applicant's registered office; or

(bb)if the applicant does not have a registered office the address of the applicant's principal place of business in the United Kingdom, and if the applicant does not have a principal place of business in the United Kingdom, the address of the applicant's principal place of business; and

(iv)the place or places from which-

(aa)the applicant's operations under the licence; or

(bb)any commercial activities in connection with those operations,

will be directed and controlled.

Fees

7.  The appropriate fee for a licence application is-

(a)in respect of a landward petroleum exploration licence, £500;

(b)in respect of a seaward petroleum exploration licence, £500;

(c)in respect of a methane drainage licence, £50;

(d)in respect of a petroleum exploration and development licence, £1,400;

(e)in respect of a seaward area production licence, £2,100;

Form of licences

8.  Every licence must incorporate the model clauses prescribed for that type of licence at the time that the licence is issued, unless the Secretary of State thinks fit to modify or exclude them in any particular case.

Regulation 2

SCHEDULE 1Lines dividing Landward Areas from Seaward Areas

1.  Except as provided by paragraphs 2 to 6, the lines dividing-

(a)the mainland of Great Britain and Northern Ireland and adjacent islands (other than the Orkney and Shetland Islands) and the waters adjacent to the mainland and such islands, to be treated for the purposes of these Regulations as landward areas, from

(b)the islands and waters to be treated for such purposes as seaward areas,

is the low water line along the coast of the mainland of Great Britain and Northern Ireland, the Isle of Wight, Anglesey and Holy Island.

2.  The lines dividing landward areas from seaward areas at the estuaries, rivers, harbours, bays and other places specified in the second column of Table 1 of this Schedule are straight lines drawn between the pairs of points identified by the map references respectively specified in the third column of that Table, each such point being a point situated on the low water line on or adjacent to the feature named in the fourth column of that Table.

3.  The lines dividing landward areas from seaward areas between Cape Wrath and the Mull of Kintyre are a series of straight lines drawn so as to join successively, in the order in which they are there set out, the points identified by the map references specified in the second column of Table 2 of this Schedule, each such point being a point situated on the low water line on or adjacent to the feature, if any, named in the third column of that Table.

4.  The lines dividing landward areas from seaward areas in the vicinity of the Pentland Firth and the Orkney Islands are-

(a)a straight line drawn from the map reference point ND 310753, being a point situated on the low water line on or adjacent to the feature known as St John's Point, to the map reference point ND 289809;

(b)from the map reference point ND 289809, a line running clockwise parallel with, and three nautical miles seaward of, the baselines from which the breadth of the territorial sea adjacent to the Orkney Islands is measured to the map reference point ND 459711; and

(c)from the map reference point ND 459711, a straight line to the map reference point ND 407734, being a point situated on the low water line on or adjacent to the feature known as Duncansby Head.

5.  The lines dividing landward areas from seaward areas at the bays and harbour specified in the second column of Table 3 of this Schedule are straight lines drawn between the points identified by the map references specified in the third column of that Table, each such point being a point situated on the low water line on or adjacent to the feature named in the fourth column of that Table.

6.  Subject to the provisions of the paragraphs 2 to 5, the lines dividing landward areas from seaward areas at the mouths of rivers or estuaries are straight lines joining the points on the low water lines at either side of each such mouth.

7.  The line dividing the Shetland Islands and the waters adjacent to those Islands, to be treated for the purposes of these Regulations as landward areas, from the areas to be treated for such purposes as seaward areas, is-

(a)a line parallel with, and

(b)three nautical miles seaward of,

the baselines from which the breadth of the territorial sea adjacent to those Islands is measured, except that Foula and Fair Isle and the waters adjacent to them are to be treated as seaward areas.

8.  In this Schedule-

(a)"low water line" means the line so marked on the Ordnance Survey maps on a scale of 1:25,000 in the case of maps relating to Great Britain, and 1:50,000 in the case of maps relating to Northern Ireland, in the edition for the areas to which they respectively relate last published prior to the date on which these Regulations are made,

(b)any reference to a map reference point is a reference to a point having that map reference on the National Grid for those Ordnance Survey maps, and

(c)"nautical miles" means international nautical miles of 1,852 metres.

Regulation 4(2), (3)

SCHEDULE 2Information and supporting documentation required for an application for a petroleum exploration and development licence or a seaward area production licence

1.  Name of each applicant in full.

2.  If the application is made by more than one person, and the applicants have agreed on the manner in which the benefits resulting from the exploitation of the licence should be shared between them, the share each applicant would be entitled to take.

3.  Except in the case of an application for a promote licence, the name of the proposed operator.

4.  The reference number of each block in respect of which the application is made and if the application is made by tender, the consideration by way of initial payment which the applicant is prepared to offer for each such block.

5.  An analysis of the geology of the area to which the application relates, identifying, in particular-

(a)petroleum prospects, and

(b)a description of the technical data on which this analysis is based.

6.  Either-

(a)the work programme for evaluating the potential petroleum production from the area to which the application relates which the applicant proposes to undertake under the licence applied for; or

(b)a description of any evaluation of the potential petroleum production from the area to which the application relates that has previously been undertaken, if no further evaluation is proposed to be undertaken under the licence,

except in a case where the Secretary of State indicates this is not required.

7.  Where applicable-

(a)evidence of the operator's technical competence and capacity to undertake the work programme mentioned in paragraph 6(a), and

(b)an explanation of the way in which the work programme takes account of the analysis of geology mentioned in paragraph 5.

8.  In respect of each applicant-

(a)where the applicant is a body corporate-

(aa)its place of incorporation;

(bb)its registration number at Companies House or other appropriate registration number or identifier, or if it is registered in another jurisdiction, its registration number or other identifier from that jurisdiction;

(b)where the applicant is an individual, the applicant's usual residential address, otherwise-

(aa)the address of the applicant's registered office; or

(bb)if the applicant does not have a registered office the address of the applicant's principal place of business in the United Kingdom; and if the applicant does not have a principal place of business in the United Kingdom, the address of the applicant's principal place of business;

(c)the place from which-

(i)the applicant's operations under the licence, or

(ii)any commercial activities in connection with those operations,

will be directed and controlled;

(d)where the applicant is a business, a copy of-

(i)the most recent audited accounts; and

(ii)where the applicant is also a body corporate, the most recent audited accounts of any body corporate having control of the applicant,

but if-

(aa)the most recent audited accounts are in respect of a period ending on a date more than twelve months before the date of the application, a copy of a balance sheet showing the state of the body corporate's affairs as at the latest date within that twelve months period in respect of which a balance sheet can be made available must be supplied, or

(bb)there are not yet any audited accounts, a copy of a balance sheet showing the state of the body corporate's affairs at the date of the licence application must be supplied.

9.  For the purposes of paragraph 8(d)(ii), whether a body corporate has control of another body corporate is determined as if sections 450(2) to (4) and 451(1) to (5) of the Corporation Tax Act 2010(5) applied subject to the following modifications-

(a)for the words "the greater part" wherever they occur in section 450(3) there were substituted the words "one-third or more";

(b)in section 451(4), for the word "may", there were substituted the word "must"; and

(c)in section 451(4) and (5) any reference to an associate of a person is construed as including only a relative of that person (as defined by section 448(2) of the Corporation Tax Act 2010), a partner of that person and a trustee of a settlement (as defined by section 620 of the Income Tax (Trading and Other Income) Act 2005(6)) of which that person is a beneficiary.

Regulation 4(3)

SCHEDULE 3Additional information and supporting documentation required for an application for a seaward area production licence

1.  Except where the licence applied for is a promote licence, evidence that the applicant will be able to meet the costs of any damage which may be caused by the release or escape of petroleum through drilling or production operations, including, where appropriate, evidence that the proposed operator is a member of the Offshore Pollution Liability Association Limited, or any body which may after the date upon which these Regulations come into force assume responsibility for the functions currently carried out by the Offshore Pollution Liability Association Limited.

2.  A statement of the general environmental policy of the proposed operator in respect of activities licensed in seaward areas by the Secretary of State in accordance with section 3 of the Petroleum Act 1998(7) together with a summary of-

(a)its management systems for the implementation of that policy, and

(b)where applicable, how those management systems will be applied to the work programme provided in accordance with paragraph 6(a) of Schedule 2.

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations consolidate with amendments the Petroleum (Production) (Seaward Areas) Regulations 1988 and the Petroleum (Production) (Landward Areas) Regulations 1995 (except for those parts of the 1995 Regulations concerning the model clauses for methane drainage licences).

The Regulations set out the requirements for applications for the following kinds of licences:

• a landward petroleum exploration licence,

• a seaward petroleum exploration licence,

• a methane drainage licence,

• a petroleum exploration and development licence, and

• a seaward area production licence,

being licences connected with the search for and getting of petroleum in Great Britain and those islands and waters adjacent to it which are "landward areas" as defined in the Regulations and in those waters around the United Kingdom and those islands adjacent to it which are "seaward areas" as defined in the Regulations (see regulation 2 and Schedule 1).

Regulation 4 requires that applications for a petroleum exploration and development licence or a seaward area production licence must be made via the portal provided by the Department of Energy and Climate Change on a publicly accessible web site, otherwise applications must be in writing (which includes transmission by email). Applications must be accompanied by such evidence and particulars or documents in support as are specified in these Regulations in respect of the licence being applied for, and must be accompanied by the appropriate fee (as set by regulation 7).

Regulation 5 sets out the application process for a petroleum exploration and development licence or a seaward area production licence, where except in the special case covered by paragraph (6), all applications must be in response to a notice published in the Official Journal of the European Union. The special case in paragraph (6) is where the Secretary of State decides that geological or production considerations justify it, a licence may be granted in respect of any area to the holder of a licence in respect of a contiguous area. Holders of licences in respect of all contiguous areas would be notified by the Secretary of State and invited to submit a licence application.

Regulation 6 sets out the information required for an application for a landward petroleum exploration licence, a seaward petroleum exploration licence and a methane drainage licence, and regulation 7 specifies the fees for licence applications.

Regulation 8 requires that all licences must contain the model clauses prescribed by the Secretary of State in relation to that type of licence at the time of issue of the licence, unless the Secretary of State thinks fit to modify or exclude them in any particular case. The model clauses are contained in various instruments, and are updated periodically.

An impact assessment has not been produced for this instrument as it has no direct impact on business, the public sector, charities or voluntary bodies.