Oil Taxation Act 1975 section Schedule 3 paragraph 6

Oil owned by a person other than a participator in the oil field from which it was won

Schedule 3 paragraph 6 deals with how oil is valued for petroleum revenue tax purposes when a proportion of a participator's share of oil from a field is owned by a non-participator under certain types of agreement.

• Where a non-participator owns a proportion (not a specific quantity) of a participator's share of oil from a field under an agreement not covered by paragraph 5, special valuation rules apply
• The oil acquired by the non-participator owner is always treated as having been disposed of to them by the participator otherwise than at arm's length, meaning market value would normally be used
• Any delivery of that oil by the participator — whether to the owner directly or to a third party on the owner's behalf — is treated as a delivery by the participator for tax purposes, even though the participator does not own the oil
• The participator can claim, within two months of the end of the chargeable period, to have the oil valued at the actual arm's length sale price achieved by the owner, rather than at market value, provided the claim covers all such oil that was sold at arm's length by or on behalf of the owner

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