What is an oil field for petroleum revenue tax purposes under the Oil Taxation Act 1975?

An oil field is any area that the appropriate authority formally determines to be an oil field, provided every part of that area falls within a licensed area. It does not arise automatically upon discovery of oil. The determination triggers the application of petroleum revenue tax to profits from that field.

Which authority determines whether an area is an oil field under United Kingdom oil taxation law?

The appropriate authority depends on the location of the area. If the area falls within the OGA's licensing jurisdiction under the Petroleum Act 1998, the OGA is the authority. If it falls within the Scottish Ministers' or Welsh Ministers' jurisdiction, they are the authority respectively.

What happens when a proposed oil field crosses jurisdictional boundaries?

When an area straddles multiple licensing jurisdictions, the relevant authorities must act jointly. For example, if part is licensable by the OGA and part by the Scottish Ministers, both must jointly determine the oil field. Where Northern Ireland is involved, representations may be submitted to either authority.

Why is the formal determination of an oil field significant for PRT?

The formal determination is significant because it triggers the application of petroleum revenue tax to the profits arising from activities within the defined oil field. The boundaries set by the determination define which revenues and activities fall within scope of PRT.

Oil Taxation Act 1975 Schedule 1 paragraph 1

Areas that are oil fields

Schedule 1 paragraph 1 defines what constitutes an oil field for petroleum revenue tax purposes and identifies which authority has the power to make that determination depending on where the field is located.

An oil field is any area that the appropriate authority determines to be an oil field, provided every part of it falls within a licensed area.
The Oil and Gas Authority (OGA) is the appropriate authority for areas where it can grant licences under the Petroleum Act 1998, while the Scottish Ministers or Welsh Ministers are the authority for areas within their respective licensing jurisdictions.
Where an area straddles jurisdictions — for example, partly under the OGA and partly under the Scottish Ministers, Welsh Ministers, or the Department of Commerce for Northern Ireland — the relevant bodies must act jointly as the appropriate authority.
When joint authority applies involving Northern Ireland, representations may be made to either the OGA or the Department of Commerce for Northern Ireland.

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