PRT: oil allowance - amount of allowance
The amount of oil allowance varies according to the type of field. Categorisation depends upon the location and timing of development consent and is as follows:
- A field other than a ‘relevant new field’ or a ‘relevant Southern Basin or onshore field’ (see below) has a maximum oil allowance of 250,000 metric tonnes per chargeable period and a total 5 million metric tonnes per field.
- Relevant new fields have a maximum oil allowance of 500,000 metric tonnes per chargeable period and a total 10 million metric tonnes per field. ‘Relevant new fields’ as defined by FA83\S36(2) are mainly, but not exclusively, fields for which development consent was given on or after 1 April 1982 and which are not onshore fields nor fields in areas east of the United Kingdom and between latitudes 52° and 55° North (i.e. Southern Basin fields).
- Relevant Southern Basin or onshore fields have a maximum oil allowance of 125,000 metric tonnes per chargeable period (for chargeable periods ending after 30 June 1988 (FA88\S138(1))and a total allowance of 2.5 million metric tonnes per field. ‘Relevant Southern Basin or onshore fields’ are defined by FA88\S138(2) as any field other than one which is a relevant new field for the purposes of FA83\S36 or for which development consent was given before 1 April 1982.
Under OTA75\S8(7), one metric tonne is equivalent to 1,100 cubic metres of gas at a temperature of 150 centigrade and pressure of one atmosphere. This follows the definition in OTA\S1(4), ‘critical half year’ (see OT04005).
Division of Oil Allowance
Where there are more participators than one in the field the oil allowance due is to be divided between the participators in proportion to their respective shares in the oil ‘won and saved’ from the field during the period. The meaning of ‘won and saved’ is considered further at OT17200.
The total oil allowance is divided in practice either
- on an equity basis, i.e. by reference to each participator’s field interest,
- or on a liftings basis, i.e. in proportion to liftings in the period, adjusted by movement in stock entitlements.
Whichever basis is used must be used consistently for all participators in the field and for all periods.
Field Limit, OTA75\S8(6)
For treatment of oil allowance in the final periods it is available, see OT17300.
Field Limit, Interaction with Safeguard, OTA75\S9A(3)
See OT17750 on the interaction of OTA75\8(6) with the rules concerning the deferral of claims during safeguard.
Interaction with Spreading Elections, OTA75\SCH3\PARA10
See OT13150 regarding the possible reduction of oil allowance otherwise due when a spreading election has been made.