Part 2

Plant and machinery allowances
Chapter 13

Provisions affecting mining and oil industries

Oil production sharing contracts

Expenditure on plant or machinery incurred by contractor
168
1
This section applies if—
a
the contractor incurs capital expenditure on the provision of plant or machinery of a description specified in the contract,
b
the plant or machinery is to have an oil-related use under the contract, for the purposes of a trade of oil extraction carried on by the contractor,
c
the amount of the expenditure is commensurate with the value of the contractor’s interest under the contract, and
d
the plant or machinery is transferred to the government or representative in accordance with the contract.
2
Despite the transfer, the plant or machinery is to be treated for the purposes of this Part as owned by the contractor (and not by any other person) until—
a
it ceases to be owned by the government or representative, or
b
it ceases to be used, or held for use, by any person under the contract.
This is subject to section 170(2).