(1)The following section shall be inserted after section 94 of the M1Finance Act 1993 (computations in different currencies for different parts of trades)—
(1)If a trade carried on by a petroleum extraction company is a ring fence trade—
(a)subsection (1) of section 94 above shall not apply as regards the trade, but
(b)regulations may make provision under that section as regards a case where in an accounting period the company carries on the trade and the condition mentioned in subsection (2) below is fulfilled.
(2)The condition is that—
(a)part of the trade consists of activities which relate to oil and are carried on under the authority of a petroleum licence in the United Kingdom or a designated area, and
(b)part of the trade consists of activities which relate to gas and are carried on under the authority of a petroleum licence in the United Kingdom or a designated area.
(3)For the purposes of this section—
(a)a petroleum licence is a licence granted under the Petroleum (Production) Act 1934 or the Petroleum (Production) Act (Northern Ireland) 1964;
(b)a petroleum extraction company is a company which carries on activities under the authority of such a licence;
(c)a designated area is an area designated by Order in Council under section 1(7) of the Continental Shelf Act 1964.
(4)For the purposes of this section “ring fence trade” means activities which—
(a)fall within any of paragraphs (a) to (c) of subsection (1) of section 492 of the Taxes Act 1988 (oil extraction etc.), and
(b)constitute a separate trade (whether by virtue of that subsection or otherwise).
(5)For the purposes of this section—
(a)“oil” means such substance as falls within the meaning of oil contained in section 502(1) of the Taxes Act 1988 and is not gas;
(b)“gas” means such substance as falls within the meaning of oil contained in section 502(1) of the Taxes Act 1988 and is gas of which the largest component by volume, measured at a temperature of 15 degrees centigrade and a pressure of one atmosphere, is methane or ethane or a combination of those gases.”
(2)In section 95(6) of the M2Finance Act 1993 (commencement of provisions about currency to be used for computations) for “94” there shall be substituted “ 94A ”.