OT60145 - Transferable Tax History - Tracking following cessation of production

If a field is purchased with TTH, and there is tariff generating infrastructure associated with that asset which continues to be used after cessation of production from the field, the tariff income and expenses will be included in the calculation of the tracked profits.

Where the field is decommissioned at a time where the pipeline is still operational there will be a “moving activation point” with the profits/losses associated with the pipeline after cessation of production being added onto the tracked profits, and in effect year on year moving the activation point. This would be the same for any post cessation expenses. An example of this is shown below:
 

Year	Profits	Tariff Income	Total Profits	TNTP	Decom	Cumulative Decom (CD)	CD-TNTP	Activated TTH
1	900	100	1,000	1,000			(1,000)
2	900	100	1,000	2,000			(2,000)
3	1,400	100	1,500	3,500			(3,500)
4	1,400	100	1,500	5,000			(5,000)
5		100	100	5,100	1,000	1,000	(4,100)
6		100	100	5,200	3,000	4,000	(1,200)
7		100	100	5,300	2,500	6,500	1,200	1,200
8		150	150	5,450		6,500	1,050	1,050
9		150	150	5,600		6,500	900	900
10		200	200	5,800		6,500	700	700
11				5,800	1,200	7,700	1,900	1,900

Where TTH has been activated but not claimed and further tracked profits are generated by the field the activated TTH should be reduced accordingly by “deactivating” the activated TTH by the amount of any additional profits.