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environmental complications) it can take less than three months
from the application. However, in a large licensing round with
many licences and applicants it can take up to two years. There are
currently two types of offshore licence awarded by DECC: the
„exploration‟ licence and the „production‟ licence. Under a
seaward petroleum exploration licence, seismic surveys and
shallow drilling can be performed in acreage not already licensed.
Other parties may hold an exploration licence over the same area,
and it is therefore a non-exclusive licence. Under a seaward
petroleum production licence, the licensee is granted the right to
search for, bore for and extract hydrocarbons from the UKCS in
the area prescribed under the terms of the licence for the full life of
the field from the exploration phase and development to
decommissioning. Three subcategories of production licence exist.
The most common of these is the „traditional licence‟. Potential
applicants must be able to demonstrate financial, technical and
environmental capability in order to be successful. The „promote‟
licence (introduced in 2002) is designed to award smaller
companies with production rights and allow a two-year period in
which to obtain the requisite financial and technical capabilities
prior to development. The „frontier‟ licence (introduced in 2003)
recognises the difficulties in sourcing oil in remote areas of the
UKCS (such as the deep waters west of Shetland) and permits
screening over a large area to look for a wide range of prospects.
Onshore production is governed by the onshore production and
development licence, which follows a similar form to the offshore
licences described above.

Does the government have any right to participate in a
licence!
If so, is there a maximum participating interest it can
obtain and are there any mandatory carry requirements for its
interest? Does the government have any right to participate in the

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