Oil contractors ring fence: scope
Oil or gas contractors are subject to this legislation if they carry out exploration or exploitation activities in, or in connection with, which the contractor provides, operates or uses a relevant asset in a relevant offshore area CTA2010\S356L.
A contractor who does not use a relevant asset as part of their activities, for example because the asset is owned by the contractor and not subject to any lease, is not within the scope of Part 8ZA.
If the asset is not used in the relevant offshore area, then the asset will not be a relevant asset. Accordingly, services provided by a group member will not be activities “in connection with” the use of a relevant asset and will fall outside the contractors ring fence
Exploration and exploitation activities
Exploration and exploitation activities are defined as activities carried on in connection with the exploration or exploitation of the sea bed and subsoil and their natural resources. This definition matches that provided by CTA2009\S1313 OT40600 and it does not include activities that are not carried on in connection with any aspect of oil exploration or exploitation e.g. wind farm construction.
In connection with
The phrase in connection with has a wide meaning although it has to be considered within its legislative context. For example, services carried out by a separate member of a drilling group, which are in support of a rig operating on the UKCS will be in connection with a relevant asset, if that asset is leased by a company which is an associated person OT50020 even if those services do not themselves directly include the payment of a lease by the service provider.
The term relevant asset is defined in OT50010
Relevant offshore area
A relevant offshore area is defined as the territorial sea (see CTA2010\S1170, ITA2007\S1013 and TCGA92\S276) and the UK Continental Shelf (see Continental Shelf Act 1964 and CTA2010\S356L(5)).