Oil & Gas
Abandonment Allowance (AA)
A 100% allowance for expenditure incurred in respect of abandoning a
Costs incurred in survey, exploitation and appraisal of
areas not yet under
or in production.
judged to be capable of producing sufficient net income to be worth developing.
Conveying & Treating (C&T)
Services provided by a
to other fields in vicinity.
Cross Field Allowance (CFA)
An element (up to 10%) of immediate relief for qualifying
development costs where a participator on a new taxable development has, or expects to have,
profits in another taxable field.
All costs including financing costs,
expenditures incurred in bringing a
production and is defined as tangible assets.
Used to convert future income / expenditure to its present day value.
All costs, including premium payments, associated with acquisition of new acreage, drilling of
and other costs incurred in evaluating
viability of geological entities.
that may not produce enough net income to make it worth developing at a given time; should technical or economic conditions change, such a field may become
Mineral Extraction Allowance (MEA)
Expenditure on mineral exploration and access and certain costs in acquiring mineral assets may be relieved by way of MEA.
Net present value (NPV)
Discounted value of future cash flow.
A gross production relief that reduces effective
rate, but cannot be used to create a tax loss.
Oil Taxation Act
Came into force in 1975, introducing
Petroleum Revenue Tax (PRT)
Applies to UK
production and associated profits of
. Only to
consent was first given before 18 March 1993.
Research expenditure allowance (R&D)
Relief makes allowable against a participator's liability for any
, R&D costs that do not became allowable in a particular field within three years of being incurred.
General and administrative (G&A) costs of a revenue nature and intangible
costs are usually deducted in full as incurred.
As part of some early
round conditions there was an obligation to pay a royalty on "value of the
" which is deductible in computing
Scientific research allowances (SRA)
Whether of a capital nature or otherwise (costs of
qualifies for full write-off as incurred.
International market in which oil or oil products are traded for immediate delivery at current (spot) price.
Payments made by
to other fields that provide transportation and / or processing of production.
Tariff Receipt Allowance (TRA)
Participators in owner
share an allowance equivalent to 250,000
of throughput per chargeable period for each taxable user field.
Value Added Tax (VAT)
Introduced at 8% on UK domestic fuel and power in April 1994.
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Copyright © 1999 E&P Consultancy Associates.
Revised - - 26 August 1999