Section 107 | Transmedian fields.

(1)The Oil Taxation Acts shall have effect in accordance with this section where provision is made by an agreement between the government of the United Kingdom and the government of another country for—

(a)the exploitation as a single unit of oil in strata in the sea bed and subsoil of an area consisting of—

(i)an oil field within the meaning of Part I of the Oil Taxation Act 1975; and

(ii)a sector under the jurisdiction of the other country; and

(b)the apportionment of the oil between—

(i)the participators in that field; and

(ii)the persons who are, or have rights, interests or obligations of, licensees in respect of that sector under the law of the other country.

(2)The share of a participator in the oil won from the oil field shall be determined as if the oil won from the field consisted of so much of the oil won from the area as a whole as is apportioned to the participators in accordance with the agreement; and in section 10(3)(b) of the said Act of 1975 (restriction of allowable expenditure) and paragraphs 5(2)(a) and 7 of Schedule 2 to that Act (returns and information as to oil won from the field) references to oil won from the field shall be construed as references to so much of the oil won from the area as a whole as is so apportioned.

(3)Subject to subsection (2) above—

(a)the oil field shall be deemed to include the sector mentioned in subsection (1)(a)(ii) above;

(b)that sector shall be deemed to be a designated area; and

(c)references to oil shall include references to any substance that would be oil within the meaning of the said Act of 1975 if the enactments mentioned in section 1(1) extended to that sector;

but paragraph (a) above does not affect section 10(3)(a) of that Act or paragraph 4 of Schedule 2 to that Act (appointment of responsible person), and paragraph (b) above does not affect section 5(1)(b) of that Act (abortive exploration expenditure) or operate so as to apply section 38(4) of the Finance Act 1973 (taxation of non-residents engaged in activities in designated areas) to the persons referred to in subsection (1)(b)(ii) above.

(4)Where under the agreement there is a re-determination of the apportionment mentioned in subsection (1)(b) above and in consequence thereof the participators in the field receive a repayment in respect of expenditure which has been allowed for the field under section 3 of the said Act of 1975, the total amount of expenditure allowable under that section and section 4 of that Act for the field in the claim period in which the repayment is received shall be reduced by the amount of the repayment; and paragraph 6 of Schedule 4 to that Act (recovery of deductions from allowable expenditure) shall have effect as if the foregoing provisions of this subsection were relevant provisions within the meaning of that paragraph.

(5)Repealed^F1

(6)In subsections (4) above references to a repayment include references to a credit or set-off.^F2

(7)In this section “the Oil Taxation Acts” means the Oil Taxation Act 1975, any other enactment relating to petroleum revenue tax and the provisions of the Income Tax Acts and Corporation Tax Acts in their application to oil extraction activities and oil rights within the meaning ofPart 8 of the Corporation Tax Act 2010 or Chapter 16A of Part 2 of the Income Tax (Trading and Other Income) Act 2005.^F3F4

(8)This section has effect whether the agreement mentioned in subsection (1) above is made before or after the passing of this Act and applies in relation to a chargeable period ending before the coming into force of this Act as well as to a chargeable period ending later.