Income Tax (Trading and Other Income) Act 2005 section 225A

Meaning of "oil extraction activities"

Section 225A defines what counts as "oil extraction activities" for the purposes of the oil activities chapter, covering the full upstream cycle from searching for oil through to its initial treatment and storage.

• Oil extraction activities include searching for oil, extracting it, transporting it from offshore locations, and carrying out initial treatment or storage — all within the UK or a designated area and under authorised extraction rights held by the person concerned
• Transportation of offshore oil qualifies only if it ends at the first UK landing point, or at the place where a seller in an arm's length transaction could reasonably be expected to deliver it (and if there is more than one such place, the one nearest to the point of extraction)
• The definitions of "initial storage" and "initial treatment" are taken from section 12(1) of the Oil Taxation Act 1975, with an adjustment so that storage capacity limits are scaled down in proportion to a person's share of oil won from a particular field
• The definition also extends to cover tariff receipts and related matters under section 225M(6), which should be read alongside this section