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Income Tax Act 2007

Income - Income from petroleum mining

CT 5B: Resuming commercial production

You could also call this:

“Rules for restarting oil or gas production after previously stopping”

This section is about what happens when you start producing oil or gas again in an area where you had stopped before. If you’re an oil or gas company, or you’re working with one, and you start producing again in a place where you got money back for stopping earlier, you need to know this.

When you start producing again, you might have to pay back some of the money you got earlier. The amount you pay back is the same as the money you got for stopping, but only for the stuff you’re using to start producing again.

You have to pay this money in the same year that you start producing again. This applies whether you’re the oil or gas company starting up again, or if you’re getting someone else to do the work for you.

Remember, this only matters if you got money back earlier for stopping production in that area. The government keeps track of this to make sure everything is fair.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS43307.

Topics:
Money and consumer rights > Taxes
Environment and resources > Farming and fishing
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CT 5: Petroleum mining operations outside New Zealand, or

“Rules for petroleum mining outside New Zealand”

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CT 6: Meaning of petroleum miner, or

“Definition of a petroleum miner in the oil and gas industry”

Part C Income
Income from petroleum mining

CT 5BResuming commercial production

  1. This section applies when a petroleum miner or a farm-in party undertakes commercial production in a permit area when a petroleum miner, or a farm-in party, has received a deduction under section EJ 13 (Permanently ceasing petroleum mining operations) for permanently ceasing petroleum mining operations in the permit area.

  2. An amount described in subsection (3) is treated as income of the petroleum miner who, at any time after the petroleum mining operations have ceased under section EJ 13,—

  3. undertakes commercial production (the resumed commercial production) in the permit area:
    1. arranges for a farm-in party to undertake the resumed commercial production in the permit area.

      1. The amount referred to in subsection (2) that is treated as income is an amount that is equal to the amount of the deduction allowed under section EJ 13 to the extent to which it relates to a petroleum mining asset that is used or is to be used in the resumed commercial production.

      2. The amount is allocated to the income year in which the resumed commercial production in the permit area begins.

      Notes
      • Section CT 5B: inserted, on , by section 27(1) (and see section 27(2) for application) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).