4(1)The model clauses set out—
(a)in Schedule 5 to the M1Petroleum (Production) Regulations 1976 as amended by the M2Oil and Gas (Enterprise) Act 1982;
(b)in that Schedule as amended by the M3Petroleum (Production) (Amendment) Regulations 1978 and the 1982 Act; and
(c)in that Schedule as amended by the 1978 Regulations, the M4Petroleum (Production) (Amendment) Regulations 1980 and the 1982 Act,
(clauses incorporated in production licences for seaward areas) shall have effect with the following amendments (which relate to royalty payments, royalty in kind, arbitration and measurement etc. of petroleum).
(2)In clause 9(1)—
(a)for “paragraphs (2) to (4)” there shall be substituted “ paragraph (1A) ”; and
(b)for “clause 10” there shall be substituted “ clauses 9A and 10 ”.
(3)In clause 9, for paragraphs (2) to (4) there shall be substituted—
“(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 11 of this licence; but if the petroleum delivered has a value of less than the appropriate percentage of the aggregate of—
(a)the value of the petroleum delivered (ignoring any such excess as is mentioned in paragraph (10) 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.”
(4)In clause 9(5), for “clause 10” there shall be substituted “ clauses 9A and 10 ”.
(5)In clause 9, for paragraph (7) there shall be substituted—
“(7)Subject to paragraphs (8) and (9) of this clause, the value of petroleum delivered to the Minister in pursuance of clause 11 of this licence shall be ascertained for the purposes of this clause and clause 9A on such basis (or, where petroleum of more than one kind is delivered, such bases) as the Minister and the Licensee agree.
(8)If the Minister and the Licensee fail to agree on the value of any petroleum delivered to the Minister in pursuance of clause 11 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.
(9)The Licensee may, during the period of 28 days beginning with the day on which he receives a notice from the Minister under paragraph (8) of this clause, refer to arbitration in the manner provided by clause 41 of this licence any question as to whether the basis of valuation specified in the notice is fair.
(10)In this clause and clauses 9A and 10, references to petroleum delivered to the Minister in pursuance of clause 11 include references to any excess over the quantity required to be delivered by a notice served in pursuance of paragraph (1) of that clause.”
(6)After clause 9, there shall be inserted—
If in any chargeable period the Licensee delivers to the Minister in pursuance of clause 11 of this licence petroleum having a value greater than the appropriate percentage of the aggregate of—
(a)the value of the petroleum delivered (ignoring any such excess as is mentioned in clause 9(10) 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.”
(7)In clause 10(3), for “9(3) or (4)” there shall be substituted “ 9(1A) ”.
(8)In clause 10(7), after “may” there shall be inserted “ , during the period of 28 days beginning with the day on which the Licensee receives the notice, ”.
(9)In clause 10(8)(b), for “or (5)” there shall be substituted “ , (5) or (6) ”.
(10)In clause 10, after paragraph (8) there shall be inserted—
“(8A)If a payment is made by the Minister in pursuance of clause 9A of this licence more than two months after the end of the chargeable period to which the payment relates, an amount in respect of interest on the payment from the end of those two months shall also be payable by him to the Licensee.
(8B)Interest under paragraph (8A) of this clause shall be calculated in such manner as the Minister may specify from time to time in a notice in writing given by him to the Licensee (but sub-paragraph (a) of paragraph (8) of this clause shall apply to such a notice as it applies to a notice under paragraph (8)).”
(11)In clause 12, after paragraph (1) there shall be inserted—
“(1A)If and to the extent that the Minister so directs, the duty imposed by paragraph (1) of this clause shall be discharged separately in relation to petroleum won and saved—
(a)from each part of the licensed area which is an oil field for the purposes of the Oil Taxation Act 1975,
(b)from each part of the licensed area which forms part of such an oil field extending beyond the licensed area, and
(c)from each well producing petroleum from a part of the licensed area which is not within such an oil field.
(1B)If and to the extent that the Minister so directs, the preceding provisions of this clause shall apply as if the duty to measure or weigh petroleum included a duty to ascertain its quality or composition or both; and where a direction under this paragraph is in force, the following provisions of this clause shall have effect as if references to measuring or weighing included references to ascertaining quality or composition.”