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Income Tax Act 2007

Income - Income from petroleum mining

CT 7: Meaning of petroleum mining asset

You could also call this:

“What counts as equipment or property used for petroleum mining”

A petroleum mining asset is something you use for petroleum mining. It can be a petroleum permit, which allows you to mine for petroleum. It can also be equipment or tools you use to find and get petroleum out of the ground. These tools must be used in the area where you have permission to mine, and they can only be used for as long as your permit lasts.

You can also own part of a petroleum mining asset, like sharing a tool with another miner. But some things are not considered petroleum mining assets. These include the land itself and underground places where gas is stored.

Petroleum mining assets are used for specific activities. These include getting an area ready to produce petroleum, actually producing the petroleum, and processing or moving the petroleum before it’s sent to buyers or users. It also includes cleaning up and closing down the mining area when you’re done.

However, some activities are not included. If you do extra things to the petroleum after it has been separated into oil, condensate, or natural gas, these are not part of petroleum mining. This includes making the gas into liquid, squeezing it, taking out specific parts, or making new products from it. But if you do these things right where you produce the petroleum, then it is included.

You can find more information about underground gas storage in section 2 of the Crown Minerals Act 1991.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512971.

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“Money earned from mineral mining and related activities is taxable income”

Part C Income
Income from petroleum mining

CT 7Meaning of petroleum mining asset

  1. Petroleum mining asset means—

  2. a petroleum permit:
    1. an asset that—
      1. is acquired by a petroleum miner for the purpose of carrying on an activity described in subsection (3) in a permit area or areas; and
        1. has an estimated useful life that depends on, and is no longer than, the remaining life of the petroleum permit for the area or areas:
        2. a share or partial interest in an asset described in paragraph (a) or (b).

          1. Petroleum mining asset does not include—

          2. land:
            1. an underground gas storage facility as that term is defined in section 2 of the Crown Minerals Act 1991.

              1. The activities are those carried out in connection with—

              2. developing a permit area for producing petroleum:
                1. producing petroleum:
                  1. processing, storing, or transmitting petroleum before its dispatch to a buyer, consumer, processor, refinery, or user:
                    1. decommissioning.

                      1. The activities do not include further treatment to which all the following apply:

                      2. it occurs after the well stream has been separated and stabilised into crude oil, condensate, or natural gas; and
                        1. it is done—
                          1. by liquefaction or compression; or
                            1. for the extraction of constituent products; or
                              1. for the production of derivative products; and
                              2. it is not treatment at the production facilities.

                                Compare
                                Notes
                                • Section CT 7(2): replaced, on , by section 21 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                                • Section CT 7(3)(d): amended, on , by section 30(1) (and see section 30(3) for application) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                                • Section CT 7 list of defined terms decommissioning: inserted, on , by section 30(2)(a) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                                • Section CT 7 list of defined terms removal or restoration operations: repealed, on , by section 30(2)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).