(1)  Where an application has been made under section 19 , the Minister may –

(a) by instrument in writing served on the applicant, inform the applicant –

(i) that he is prepared to grant to the applicant a permit in respect of the block or blocks specified in the instrument; and

(ii) that the applicant will be required to lodge a security for compliance with the conditions to which the permit, if granted, will from time to time be subject and with the provisions of this Part and of the regulations; or

(b) refuse to grant a permit to the applicant.

(2)  An instrument under subsection (1) shall contain –

(a) a summary of the conditions subject to which the permit is to be granted; and

(b) a statement to the effect that the application will lapse if the applicant does not make a request under subsection (3) in respect of the grant of the permit and lodge with the Minister the security referred to in the instrument.

(3)  An applicant on whom there has been served an instrument under subsection (1) may, within a period of 1 month after the date of service of the instrument on him, or within such further period, not exceeding 1 month, as the Minister, on application in writing served on him before the expiration of the first-mentioned period of 1 month, allows –

(a) by instrument in writing served on the Minister, request the Minister to grant to him the permit; and

(b) lodge with the Minister the security –

referred to in the first-mentioned instrument.

(4)  Where an applicant on whom there has been served an instrument under subsection (1) –

(a) has made a request under subsection (3) ; and

(b) has lodged with the Minister the security referred to in the instrument –

within the period applicable under subsection (3) , the Minister shall grant to him an exploration permit for petroleum in respect of the block or blocks specified in the instrument.

(5)  Where an applicant on whom there has been served an instrument under subsection (1) –

(a) has not made a request under subsection (3) ; or

(b) has not lodged with the Minister the security referred to in the instrument –

within the period applicable under subsection (3) , the application lapses upon the expiration of that period.