Introduction Details of the Schedule
4.Paragraph 2 provides that a company’s pool of field allowances for an accounting period are the amount of the company’s pool of field allowances that are carried forward from the previous accounting period plus the aggregate of field allowances activated in the accounting period.
5.Paragraphs 3 and 4 provide the rules for determining the amount of field allowances that are carried forward into a future accounting period.
6.Paragraph 5 provides that from the day a new oil field is licensed, a company that is an initial licensee in that field will hold a field allowance for that field. The amount of field allowance will be determined by the company’s equity share in the field.
7.Paragraph 7 applies if a company holds a field allowance. The unactivated amount of that allowance is the difference between:
8.Paragraph 8 provides that four conditions are to be met in respect of a new oil field for the activation of field allowance where there is no change in equity share during the accounting period.
9.Paragraph 9 provides the rules for determining the amount of field allowance to be activated in an accounting period when all conditions in paragraph 8 are met.
10.Paragraph 10 introduces Part 5 which deals with the situation where a company’s equity share in a new oil field changes during the accounting period. The paragraph lists the four conditions which must be met if Part 5 is to apply.
11.Paragraph 11 divides the accounting period into reference periods. This facilitates the application of Part 5 where a company is not a licensee for a whole accounting period or where the equity share changes.
12.Paragraph 12 provides the calculation of field allowance for each reference period.
13.Paragraph 13 introduces Part 6 which concerns the treatment of transfers of field allowance.
14.Paragraph 14 provides the calculation for the remaining field allowance which a company (“the transferor”) has, after it has disposed of some of the equity interest in a new oil field. This is the unactivated field allowance immediately prior to the disposal, multiplied by the equity disposed of as a proportion of the equity held post-disposal.
15.Paragraph 15 provides the calculation of field allowance where a company acquires an equity interest in a new oil field. If the transferee already holds a field allowance for the new oil field, the unactivated amount of the field allowance is increased by the amount reduced for the seller in paragraph 14, pro-rated if the acquirer does not acquire all of the equity disposed of by the seller. This calculation also provides the amount of field allowance acquired where the transferee did not hold a field allowance for the new oil field at the time of acquisition.
16.Paragraph 17 also contains powers for the list of field descriptions and allowances to be amended by statutory instrument.
17.Paragraphs 18 to 24 provide details of the total field allowance and the types of new oil field which will qualify for the allowance.