Royalties
71 Royalties
Subject to the provisions of this section, lessee of a petroleum lease shall pay to the Crown royalty computed at the rate specified in the lease on the gross value of all crude petroleum, casinghead petroleum spirit, and natural gas produced or obtained from the land comprised in the lease.
For the purpose of this subsection, the gross value of the products mentioned therein respectively shall be such gross value as from time to time at intervals of not less than 12 months is mutually agreed upon by the Minister and the lessee, or, in default of such agreement, is determined by reference to arbitration under the provisions of the Commercial Arbitration Act 2012.
Such royalty shall not be payable in respect of —
casinghead petroleum spirit or natural gas, which is unavoidably lost or is returned to the natural reservoir;
crude petroleum, casinghead petroleum spirit, or natural gas, which is used by the lessee for the purposes of mining operations as approved by the Minister;
any natural gas or product thereof which is not sold.
The rate of royalty to be specified in the lease shall be fixed by the Minister at the time of granting the lease, and shall not be less than 5 per centum or more than 15 per centum of the gross value determined as aforesaid of the product in relation to which the royalty is to be payable.
Thee shall be set off against the amount of royalty payable in any year under this section the amount of any rent paid by the lessee under the lease in respect of that year; and, where the amount of rent so paid exceeds the amount of royalty so payable, no royalty shall be payable in that year.
[Section 71 inserted: No. 8 of 1940 s. 33; amended: No. 66 of 1954 s. 18; No. 23 of 2012 s. 45.]
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