A seaward production licence may be extended for a further period after its expiry date, upon request of the licensee, to allow producing fields to fully exploit the associated reserves.
A licence will automatically cease and determine upon the expiry of the duration set out in model clause titled ‘Term of Licence’. The licensee may submit a written notice to the NSTA requesting an extension for a further period; in some licences this is contemplated in the model clause titled ‘Power further to extend term of Licence’.
The NSTA will evaluate the application for a licence extension in accordance with its Central Obligation as outlined in the OGA Strategy. Early engagement with the NSTA is recommended and formal contact should be made in advance to ensure a thorough process.
The NSTA will not extend a licence until it is clearly necessary, so licensees expecting to need an extension should formally inform the NSTA 12 months before the licence’s expiry date.
The NSTA may request an update to the Field Development Plan, amongst other documentation. In addition, the applicant should note that the extension, if granted, will remove all acreage from the licence other than that related to the currently producing field(s) or discoveries where there is a clear route for first production. The extension for producing fields will continue, subject to the provisions within the extension.
*The Government, in its press release of 29 August 2024, announced its plans for new environmental guidance for oil and gas firms, to provide stability for industry and support investment, and has launched a consultation on the North Sea’s energy future, including implementation of its manifesto position not to issue new oil and gas licences to explore new fields - Building the North Sea’s energy future - GOV.UK. With this in mind, the NSTA has paused issuing any invitations to apply for new petroleum licences (including out-of-round invitations) pending the finalisation of the process.
During this time, the NSTA also intends, where applicable, to take any impacts of the mentioned consultation processes into account when considering requests to amend licence term timelines, focusing on licences with licence deadlines occurring in 2025. As normal, licensees should make any licence term deadline extension requests to the NSTA in writing at the earliest opportunity, and in any event not less than three months before the end of the relevant term/phase of the licence.
In addition to the NSTA’s usual expectations as set out in our published guidance, we encourage licensees to engage with us early on any such requests, including providing evidence on the impacts of the mentioned consultation process(es) and demonstration of the delivery of work programmes and other licence activities to date. Requests should be directed to offshore.exploration@nstauthority.co.uk