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HMRC internal manual

Oil Taxation Manual

PRT: unitisations and re-determinations - regulations

The regulations governing the issue of production licences by the Department of Energy and Climate Change (DECC) can be accessed via that department’s website . Such licences are issued to one or more participators and can cover one or more blocks. Under a production licence participators have an exclusive right to search, bore for, and get oil within the licensed area.

PRT field boundaries are determined by DECC purely on geological criteria - see OT01007. It can happen that a field can extend into two blocks, the blocks being under different ownership. Obviously it makes technical and commercial sense for the oil or gas field to be exploited jointly rather than as two separate developments under different operators. Even if the respective licence holders cannot agree to a joint development the model clauses for production licences give the Secretary of State power to require the licensees in both blocks to develop the field as one unit.