(1)  Where a permit is in force in respect of a discovery block (not being a block that is, or is included in, a location) the permittee –

(a) may; or

(b) shall, if required to do so by the Minister by instrument in writing served on the permittee –

by instrument in writing served on the Minister nominate a block in respect of which the permit is in force for the purposes of the making of a declaration under section 36 .

(2)  Where a permittee who has been required, by instrument in writing served on him under subsection (1) , to nominate a block does not, within a period of 3 months after the date of service of the instrument on him, or within such further period as the Minister, on application in writing served on him before the expiration of that period of 3 months, allows, nominate the block, the Minister may by instrument in writing served on the permittee, nominate the block.

(3)  Where a permittee or the Minister nominates a block under this section, he shall specify in the instrument of nomination a discovery block to form part of the location to be declared under section 36 , but this subsection does not prevent other discovery blocks in the permit area forming part of the location.

(4)  A block shall not be nominated under subsection (1) or (2) –

(a) if it is, or is included in, a location; or

(b) if it is such that, if the block were so nominated and the declaration under section 36 were made, the discovery block specified in the instrument of nomination would not form part of the location.

(5)  Where a discovery block in a permit area immediately adjoins another discovery block and that other discovery block –

(a) is a block –

(i) in respect of which the permit is in force;

(ii) that is, or is included in, a location; and

(iii) that was specified under subsection (3) in relation to the declaration of that location; or

(b) is a block –

(i) that was specified under subsection (3) in relation to the declaration of a location; and

(ii) in respect of which the permit has ceased to be in force by reason of the operation of section 37B (7) or 43 (5) –

the permittee shall not, without the consent of the Minister given by instrument in writing, specify the first-mentioned discovery block under subsection (3) .

(6)  The Minister may, for reasons that he thinks sufficient, refuse to give his consent under subsection (5) .

(7)  In this section –

discovery block means a block in which petroleum has been discovered.