What is a cluster area under Corporation Tax Act 2010 section 356JD?

A cluster area is an offshore area formally determined by the Oil and Gas Authority (OGA) that lies entirely on the seaward side of the United Kingdom's territorial sea baselines. It excludes any previously authorised oil field or any part of such a field, even if that field falls within its geographical boundaries.

What consultation process must the OGA follow before designating a cluster area?

The OGA must give written notice to every licensee whose licensed area falls wholly or partly within the proposed cluster area and to any other affected licensee. It must also publish notice on its website. A 30-day period is allowed for written representations, which the OGA must consider before making its determination.

When does a cluster area determination take effect?

A cluster area determination takes effect from the day it is published by the OGA. The determination may be in whatever form the OGA considers appropriate but must assign an identifying number or other designation to the cluster area so it can be clearly and consistently referenced.

Can the OGA vary or revoke a cluster area determination?

Yes, the OGA has the power to vary or revoke any cluster area determination it has made. When doing so, it must follow the same notification, consultation and publication requirements that apply to a new determination, ensuring affected licensees can make representations before any change takes effect.

Corporation Tax Act 2010 section 356JD

Meaning of "cluster area"

Section 356JD defines what a "cluster area" means for the purposes of the oil activities ring fence provisions, and sets out the process the Oil and Gas Authority (OGA) must follow when designating, varying or revoking such areas.

A cluster area is an offshore area determined by the OGA, lying entirely on the seaward side of the UK territorial sea baselines, and excluding any previously authorised oil fields
Before making a determination, the OGA must notify affected licensees in writing and publish notice on its website, allowing a 30-day period for written representations
A determination takes effect from the date of publication, may be in any form the OGA considers appropriate, and must assign an identifying number or other designation to the cluster area
The OGA may vary or revoke a cluster area determination, following the same notification and consultation process as for a new determination

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