Swap arrangements
21 Swap arrangements
(1) If a licensee, permittee or operator procures petroleum under a swap arrangement, the price received by the licensee, permittee or operator for the sale of the procured petroleum may be used to determine the value of the petroleum produced from a project area for the licence or exploration permit if:
the parties to the swap arrangement are not related parties; and
the swap arrangement is on arm's length terms; and
(c) the swap arrangement provides for the swap or exchange of rights or obligations in relation to petroleum produced by the parties; and
(d) a comparable quantity and quality of petroleum is swapped or exchanged under the swap arrangement; and
(e) the swap or exchange is made within 6 months after the petroleum is delivered or the rights vested.
(2) The petroleum produced from the project area for the licence or exploration permit must be valued at market value under a swap arrangement if:
the swap arrangement is between related parties; or
the procured petroleum is sold to a related party; or
(c) the procured petroleum is not sold to a second buyer within 6 months after the petroleum is delivered to the licensee, permittee or operator; or
subsection (1) does not otherwise apply to the petroleum.
In this section:
procured petroleum means petroleum procured by a licensee, permittee or operator under a swap arrangement.
swap arrangement means an arrangement that:
is entered into between two petroleum producers or resellers; and
(b) provides for them to swap or exchange rights or obligations in relation to petroleum produced by them.
This Act’s bill:Explanatory statementSecond reading speech
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