Section 272 | “Oil extraction activities”

(1)In this Part “oil extraction activities” means activities within any of subsections (2) to (5) (but see also section 291(6)).

(2)Activities of a company in searching for oil in the United Kingdom or a designated area or causing such searching to be carried out for it.

(3)Activities of a company in extracting, or causing to be extracted for it, oil at any place in the United Kingdom or a designated area under rights which—

(a)authorise the extraction, and

(b)are held by it or by a company associated with it.

(4)Activities of a company in transporting, or causing to be transported for it, oil extracted at any such place not on dry land under rights which—

(a)authorise the extraction, and

(b)are held as mentioned in subsection (3)(b),

if the transportation meets condition A or B (see subsections (6) and (7)).

(5)Activities of a company in effecting, or causing to be effected for it, the initial treatment or initial storage of oil won from any oil field under rights which—

(a)authorise its extraction, and

(b)are held as mentioned in subsection (3)(b).

(6)Condition A is that the transportation is to the place where the oil is first landed in the United Kingdom.

(7)Condition B is that the transportation—

(a)is to the place in the United Kingdom, or

(b)in the case of oil first landed in another country, is to the place in that or any other country (other than the United Kingdom),

at which the seller in a sale at arm's length could reasonably be expected to deliver it (or, if there is more than one such place, the one nearest to the place of extraction).

(8)The definition of “initial storage” in section 12(1) of OTA 1975 applies for the purposes of this section.

(9)But in its application for those purposes in relation to the company mentioned in subsection (5) and to oil won from any one oil field, that definition is to have effect as if the reference to the maximum daily production rate of oil for the field mentioned in that definition were to a share of that maximum daily production rate proportionate to that company's share of the oil won from that field.

(10)In this section “initial treatment” has the same meaning as in Part 1 of OTA 1975 (see section 12(1) of that Act).