(1)  A licensee is required, during the first year of the term of the licence, to carry out in or in relation to the licence area, in connection with exploration for, or operations for the recovery of, petroleum in or from the licence area approved works to the value of not less than the amount calculated by multiplying the sum of $300 000 by the number of blocks in respect of which the licence is in force.

(2)  A licensee is required, during each subsequent year of the term of the licence, to carry out in or in relation to the licence area, in connection with exploration for, or operations for the recovery of, petroleum in or from the licence area, approved works –

(a) if he did not recover petroleum in or from the licence area during the last preceding year of the term of the licence – to the value of not less than the amount calculated by multiplying the sum of $300 000 by the number of blocks in respect of which the licence is in force; or

(b) if he did recover petroleum in or from the licence area during the last preceding year of the term of the licence and the amount referred to in paragraph (a) exceeds the value of the petroleum so recovered – to the value of not less than the amount of the excess.

(3)  Where, in respect of a year of the term of his licence, a licensee has not complied with subsection (1) or (2) , the Crown is entitled to recover from the licensee, by action against the licensee in a court of competent jurisdiction, an amount equal to the value of the approved works that the licensee was required to carry out in or in relation to the licence area during that year of the term of the licence less the value of any approved works carried out by the licensee in or in relation to that area during that year.

(4)  The Minister may, if he is satisfied that special circumstances exist that justify his doing so, by instrument in writing served on a licensee, exempt the licensee from compliance with the requirements of this section in respect of the year of the term of the licence specified in the instrument subject to such conditions, if any, as the Minister thinks fit and specifies in the instrument.

(5)  For the purposes of this section –

(a) the quantity of any petroleum recovered by a licensee from a well during a year shall be ascertained in accordance with Division 7 ; and

(b) the value of any petroleum is the value at the well-head of that petroleum ascertained in accordance with that Division.