Flexible licence

An Exploration and Production Licence can be divided into an Initial Term for carrying out the Exploration Work Programme, a Second Term for appraisal leading to approval of a Field Development Plan, and a Third Term, for Development and Production.

The terms and conditions in the Initial Term of an Exploration and Production Licence in the Faroese area are the same as the terms and conditions for the Innovative Licence in the UK area.

The Licence offers greater flexibility in the durations of the Initial and Second Terms. An applicant for an Innovate licence is able to propose the durations of the Initial and Second Terms, and among the permutations that may be proposed are those that represent those associated with each of the older licence types.

The Initial Term can now be subdivided into up to three phases, with the Work Programme being correspondingly divided:

  • Phase A is a period for carrying out geotechnical studies and geophysical data reprocessing;
  • Phase B is a period for undertaking seismic surveys and acquiring other geophysical data; and
  • Phase C is for drilling.

Phases A and B are optional and depend on the applicant’s plans. Every Work Programme must have at least a Phase C (just as a drilling commitment was the minimum Work Programme before the Innovate concept).

It remains the case that a Licence may only continue from the Initial Term into the Second Term if (among other things) the Initial Term Work Programme has been completed. Similarly, a Licence may only continue from one Phase into another if that part of the Term Work Programme associated with the earlier Phase has been completed and if the Licensee has committed to complete that part associated with the next. When continuing into Phase C, the licensee must also demonstrate the technical and financial capacity to carry out the Phase C part of the Work Programme.


An applicant granted a license will receive all relevant data in the licensed area free of charge.

More information on can be found on the licences in the Technical Guide below.
(If you have any questions, please contact Jarðfeingi jf@jf.fo)