(1)  Where –

(a) a lessee makes an application for the renewal of a lease; and

(b) the applicant has furnished any further information as and when required by the Minister under section 37F (4) ; and

(c) the Minister is satisfied that recovery of petroleum from the lease area –

(i) is not, at the time of the application, commercially viable; and

(ii) is likely to become commercially viable within the period of 15 years after that time –

the Minister –

(d) shall, if the lessee has complied with the conditions to which the lease is subject and with the provisions of this Part and of the regulations; or

(e) may, if the lessee has not so complied but the Minister is satisfied that special circumstances exist that justify the granting of the renewal of the lease –

inform the lessee, by instrument in writing served on the lessee, that he is prepared to grant to the lessee the renewal of the lease and that the lessee will be required to lodge a security for compliance with the conditions to which the lease, if the renewal is granted, will from time to time be subject and with the provisions of this Part and of the regulations.

(2)  Subject to subsection (3) , where –

(a) a lessee makes an application for the renewal of a lease; and

(b) either –

(i) the applicant has not furnished any further information as and when required by the Minister under section 37F (4) ; or

(ii) the Minister is not satisfied as to the matters referred to in subsection (1) (c) ; or

(iii) the lessee has not complied with the conditions to which the lease is subject and with the provisions of this Part and of the regulations and the Minister is not satisfied that special circumstances exist that justify the granting of the renewal of the lease –

the Minister shall, by instrument in writing served on the lessee, refuse to grant the renewal of the lease.

(3)  The Minister shall not refuse to grant the renewal of the lease unless –

(a) he has, by instrument in writing served on the lessee, given not less than one month's notice of his intention to refuse to grant the renewal of the lease; and

(b) he has served a copy of the instrument on such other persons, if any, as he thinks fit; and

(c) he has, in the instrument –

(i) given particulars of the reasons for the intention; and

(ii) specified a date on or before which the lessee or a person on whom a copy of the instrument is served may, by instrument in writing served on the Minister, submit any matters that the lessee wishes to be considered; and

(d) he has taken into account any matter so submitted on or before the specified date by the lessee or by a person on whom a copy of the first-mentioned instrument has been served.

(4)  An instrument referred to in subsection (1) shall contain –

(a) a summary of the conditions to which the lease, on the grant of the renewal, is to be subject; and

(b) a statement to the effect that the application will lapse if the lessee does not make a request under subsection (6) and lodge with the Minister the security referred to in the instrument.

(5)  An instrument under subsection (2) shall, where the Minister refuses to grant the renewal of a lease by reason only that the Minister is not satisfied as to the matter referred to in subsection (1) (c) (i) , contain a statement to the effect that the lessee may, within the period of 12 months after the date of service of the instrument, make an application for a licence in respect of one or more of the blocks comprised in the lease.

(6)  A lessee on whom there has been served an instrument under subsection (1) may, within a period of one month after the date of service of the instrument on the lessee –

(a) by instrument in writing served on the Minister, request the Minister to grant the lessee the renewal of the lease; and

(b) lodge with the Minister the security referred to in the first-mentioned instrument.

(7)  Where a lessee on whom there has been served an instrument under subsection (1) –

(a) has made a request under subsection (6) ; and

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

within the period referred to in subsection (6) , the Minister shall grant to the lessee the renewal of the lease.

(8)  Where a lessee on whom there has been served an instrument under subsection (1) –

(a) has not made a request under subsection (6) ; or

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

within the period referred to in subsection (6) , the application lapses upon the expiration of that period.

(9)  Where –

(a) an application for the renewal of a lease has been made; and

(b) the lease expires –

(i) before the Minister grants, or refuses to grant, the renewal of the lease; or

(ii) before the application lapses as provided by subsection (8) –

the lease shall be deemed to continue in force in all respects –

(c) until the Minister grants, or refuses to grant, the renewal of the lease; or

(d) until the application so lapses –

whichever first happens.

(10)  Where the Minister refuses to grant the renewal of a lease by reason only that the Minister is not satisfied as to the matter referred to in subsection (1) (c) (i) , the lease shall be deemed to continue in force in all respects –

(a) in a case to which paragraph (b) does not apply – until 12 months after the date of service of the instrument under subsection (2) ; or

(b) in a case where the lessee makes an application for a licence in respect of one or more of the blocks comprised in the lease within the period of 12 months after the date referred to in paragraph (a) – until the Minister grants, or refuses to grant, the licence or until the application lapses, whichever first happens.