20. Development Licence

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

Where a contractor discovers petroleum resources in commercially viable quantities in the course of conducting petroleum operations within an exploration block, such contractor shall -

(a)

forthwith inform the Authority of such discovery and conduct or cause to be conducted the required tests for the purpose of determining whether such discovery merits appraisal; and

(b)

submit a programme of work designed to appraise the petroleum potential of the designated area for approval of the Authority.

(2)

In the event that the appraisal discloses the existence of a commercially viable quantity of petroleum resources, the Authority may proceed to declare the discovery as commercially viable in a manner as may be prescribed by regulation.

(3)

The contractor shall, having considered the circumstances and the extent of the commercial discovery declared in terms of subsection (2), submit to the Authority a Development and Investment Plan which shall comprise –

(a)

such matters as may be prescribed; and

(b)

the proposal of the contractor for the development and production of the commercial discovery within the exploration block, within such period as may be determined by the Board.

(4)

Where the quantity of petroleum resources declared to be a commercial discovery in terms of subsection (2) is located within the exploration block or within more than one exploration blocks, the Authority may –

(a)

on the basis of the Development and Investment

Plan submitted by the contractor; and

(b)

if located within more than one exploration block and if no agreement has been entered into with other contractors in respect of such other exploration blocks, issue a Development Licence substantially in the format as may be prescribed to a contractor in respect of the area comprising the full extent of the discovery, subject to the terms and conditions set out in the Development Licence and to the requirements set out in the Petroleum Resources

Agreement.

(5)

When obtaining the Development Licence, a contractor shall pay a surface rental in such amount as shall be determined by the Authority taking into consideration the specific extent assigned for development under the relevant Development Licence.

Read on from s 21

Part V

National Petroleum Operator

Read on from Part V

Part VI

Fiscal Provisions

Read on from Part VI

Part VII

Chief Executive Officer and Staff of the Authority

Read on from Part VII

Part VIII

Petroleum Resources Development Fund

Read on from Part VIII

Part IX

General Provisions

Read on from Part IX