Finance Act 2009

Part 8 Interpretation

New oil fields

18 In this Schedule “new oil field” means an oil field—

(a) which is a qualifying oil field, and

(b) whose development is authorised at any time on or after 22 April 2009.

Authorising development

19 (1) In this Schedule a reference to authorisation of development of an oil field is a reference to a national authority—

(a) granting a licensee consent for development for the field,

(b) serving on a licensee a programme of development for the field, or

(c) approving a programme of development for the field.

(2) In this paragraph—

• “consent for development”, in relation to an oil field, does not include consent which is limited to the purpose of testing the characteristics of an oil-bearing area;

• “development”, in relation to an oil field, means winning oil from the field otherwise than in the course of searching for oil or drilling wells;

• “national authority” means—

  (a)

  the Secretary of State, or

  (b)

  a Northern Ireland Department.

Qualifying oil fields

20 In this Schedule “qualifying oil field” means an oil field that is, on the authorisation day—

(a) a small oil field,

(b) an ultra heavy oil field, or

(c) an ultra high pressure/high temperature oil field.

Small oil field

21 (1) In this Schedule “small oil field” means an oil field which has reserves of oil of 3,500,000 tonnes or less.

(2) For the purposes of this paragraph and paragraph 24(2)—

(a) the amount of reserves of oil which an oil field has is to be determined on the authorisation day;

(b) 1,100 cubic metres of gas at a temperature of 15 degrees celsius and pressure of one atmosphere is to be counted as equivalent to one tonne.

Ultra heavy oil field

22 (1) In this Schedule “ultra heavy oil field” means an oil field with oil at—

(a) an API gravity below 18 degrees, and

(b) a viscosity of more than 50 centipoise at reservoir temperature and pressure.

(2) For that purpose API gravity, in relation to oil, is the amount determined by the following calculation—

where G is the specific gravity of the oil at 15.56 degrees celsius.

Ultra high pressure/high temperature oil field

23 In this Schedule “ultra high pressure/high temperature oil field” means an oil field with oil at—

(a) a pressure of more than 1034 bar in the reservoir formation, and

(b) a temperature of more than 176.67 degrees celsius in the reservoir formation.

Total field allowance for new oil field

24 (1) For the purposes of this Schedule the total field allowance for a new oil field is—

(a) in the case of a small oil field, the amount determined in accordance with sub-paragraph (2),

(b) in the case of an ultra heavy oil field, £800,000,000, and

(c) in the case of an ultra high pressure/high temperature oil field, £800,000,000.

(2) The total field allowance for a small oil field is—

(a) if the oil field has reserves of oil of 2,750,000 tonnes or less, £75,000,000, and

(b) in any other case (where the oil field has reserves of more than 2,750,000 tonnes but not more than 3,500,000 tonnes), the following amount—

where X is the amount of the reserves of oil (in tonnes) which the oil field has.

Other interpretation

25 In this Schedule—

• “adjusted ring fence profits”, in relation to a company and an accounting period, means the adjusted ring fence profits that would (if this Schedule were ignored) be taken into account in calculating the supplementary charge on the company under section 501A of ICTA for the accounting period;

• “authorisation day”, in relation to a new oil field, means the day when development of the field is authorised;

• “initial licensee”, in relation to a new oil field, means a company that is licensee in the field on the authorisation day.

• “licensee” has the same meaning as in Part 1 of OTA 1975;

• “oil” has the same meaning as in Part 1 of OTA 1975;

• “oil field” has the same meaning as in Part 1 of OTA 1975;

• “relevant income”, in relation to a new oil field and an accounting period of a company, means production income of the company from any oil extraction activities carried on in the field that is taken into account in calculating the company’s adjusted ring fence profits for the accounting period.