Northern Territory Numbered Acts

PETROLEUM ROYALTY ACT 2023 (NO 6 OF 2023) - SECT 19

    (1)     The costs that are excluded for the purposes of calculating shipping costs or deductible costs under this Act in relation to petroleum produced from a project area (the excluded costs ) are the following:

    (a)     costs and expenses incurred in relation to any of the following:

        (i)     exploring for the petroleum or discovering the petroleum;

        (ii)     marketing or selling the petroleum, including fees, commission, brokerage or an amount paid to a distributor or agent;

        (iii)     maintaining a petroleum facility during an extended or permanent shutdown of the facility;

        (iv)     decommissioning, rehabilitation or abandonment of the project area or a petroleum facility;

        (v)     complying with a law of the Territory, the Commonwealth, a State or another Territory, including costs and expenses related to guarantees, securities or insurance imposed or required under the law;

        (vi)     salaries, allowances, termination payments, other similar payments or benefits, employer contributions to superannuation schemes and wages in respect of an employee or contractor for a pay period during which the employee or contractor:

(A)     did not work solely in the Territory; or

(B)     was not engaged primarily in work that was directly attributable to the production of petroleum in the Territory;

    (b)     office expenses that:

        (i)     do not relate to an office in the Territory; or

        (ii)     are not for work services performed solely in the Territory;

    (c)     fees for management services that:

        (i)     are not performed solely in the Territory; or

        (ii)     are not directly attributable to the production of petroleum in the Territory;

    (d)     travel and ancillary costs in relation to an employee, contractor or other worker whose principal place of residence is outside the Territory;

    (e)     interest and financing costs;

    (f)     foreign exchange gains or losses;

    (g)     hedging costs;

    (h)     costs associated with bad debts;

        (i)     asset revaluation gains or losses;

    (j)     royalties or similar payments;

    (k)     taxes, levies or fees imposed or payable under a law of the Territory, the Commonwealth, a State or another Territory;

    (l)     costs of negotiating with land holders or with persons related to the Native Title Act 1993 (Cth), including payments or compensation paid under an access agreement or native title agreement;

    (m)     amounts payable in relation to a breach of a legal or statutory obligation, including a penalty or damages for breach of contract.

Examples for subsection (1)(k)

1     Monitoring and compliance levy.

2     Orphan well levy.

    (2)     For subsection (1), if the sales value of petroleum is the market value of the petroleum under section 14 (2), a deductible cost incurred in relation to an activity after the first saleable point of the petroleum is taken to be an excluded cost.