Sixth Schedule: Production allowances and cost price ratio limit

There shall be a production allowance for crude oil production by leases which are converted oil mining leases based on a conversion contract and their renewals, which shall be the lower of US $2.50 per barrel and 20% of the fiscal oil price.

There shall be a production allowance per field for crude oil production by a company for leases granted after the commencement of the Petroleum Industry Act and determined as follows —

for onshore areas, the lower of US $8.00 per barrel and 20% of the fiscal oil price per barrel up to a cumulative maximum production of 50 million barrels from commencement of production and the lower of US $4.00 per barrel and 20% of the fiscal oil price thereafter ; and

for shallow water areas, the lower of US $8.00 per barrel and 20% of the fiscal oil price, up to a cumulative maximum production of 100 million barrels from commencement of production and the lower of US $4.00 per barrel and 20% of the fiscal oil price thereafter.

The detailed procedures for determining the production allowances shall be established in regulations.

Any allowance for crude oil shall also apply to condensates and liquid natural gas liquids under section 65 (2) (a) of this Act.

All costs prescribed under section 68 of this Act and under Part II of the First Schedule to this Act, excluding those related to section 68(1)(a),

and (h), in an accounting period the sum of which is eligible for deduction under the hydrocarbon tax shall be subject to a cost price ratio limit of 65% of gross revenues determined at the measurement points.

Where, as a result of subparagraph (1) of this paragraph, any excess costs incurred is not allowed for deduction for that year of assessment —

the costs may be allowed for deduction for the purposes of ascertaining the profits of the company for subsequent years of assessment provided that the total costs to be deducted shall not exceed the actual costs incurred ;

the total costs to be allowed as deduction in those subsequent years shall be such an amount that if added to the sum of the total costs to be allowed as deduction under subparagraph (1) of this paragraph shall not exceed the specified cost price ratio limit of 65% ; and

where under paragraph 2 (2) (b) of this paragraph, any cost exceeds the cost price ratio limit upon the termination of upstream petroleum operations related to crude oil, such costs shall not be deductible for the purpose of calculation of the hydrocarbon tax.