PART 1 General

Citation and commencement

1. These Regulations may be cited as the Oil and Gas Authority (Levy) and Pollution Prevention and Control (Fees) (Amendment) Regulations 2018 and come into force on 1st April 2018.

PART 2 The Oil and Gas Authority Levy

Interpretation

2. In this Part—

“leviable costs” means the sum of the costs incurred by the OGA( 4 ) and the Lord Chancellor in exercising the functions referred to in section 13(2)(a) of the Energy Act 2016 excluding any costs incurred in the exercise of functions referred to in section 13(2)(b) of that Act;

“licensee” means a person holding a petroleum licence;

“non-production levy” means the licensing levy payable by a licensee for the relevant charging period to which regulation 4 applies;

“offshore exploration licence” means a petroleum licence of the sort referred to in regulation 2(2)(a) of the Offshore Exploration (Petroleum, and Gas Storage and Unloading) (Model Clauses) Regulations 2009( 5 ), relating to an area any part of which lies within offshore waters;

“offshore production licence” means a petroleum licence relating to an area any part of which lies within offshore waters which is not an offshore exploration licence;

“offshore waters” means—

“production levy” means the licensing levy payable by a licensee for the relevant charging period to which regulation 3 applies;

“petroleum licence” means a licence granted under—

which is not an excluded licence( 9 ) in relation to the relevant charging period;

“relevant charging period” means the period beginning on 1st April 2018 and ending on 31st March 2019; and

“relevant time” means 12.01a.m. on 1st April 2018.

Liability to pay production levy

3. —(1) This regulation applies to a licensee who at the relevant time—

(a) holds an offshore production licence; and

(b) in accordance with that licence, is entitled to—

(i) erect or carry out any relevant works (within the meaning of the licence) either in the licensed area or elsewhere, for the purpose of getting petroleum from that area or for the purpose of conveying to a place on land petroleum got from that area, or

(ii) get petroleum from that area otherwise than in the course of searching for petroleum, drilling wells or testing wells.

(2) Where this regulation applies, the licensee is liable to pay the production levy in respect of each offshore production licence held by the licensee to which the criteria in paragraph (1)(b) applies.

(3) Where the licensee is more than one person, the liability under paragraph (2) is joint and several.

Liability to pay non-production levy

4. —(1) This regulation applies to a licensee who at the relevant time holds either—

(a) an offshore exploration licence; or

(b) an offshore production licence where regulation 3(1)(b) does not apply.

(2) Subject to paragraph (3), where paragraph (1) applies, the licensee is liable to pay the non-production levy in respect of each licence to which the criteria in paragraph (1)(a) or (b) applies, held by the licensee.

(3) Paragraph (2) does not apply where at the relevant time a licensee is a micro-enterprise and—

(a) holds an innovate licence in phase B of its initial term; or

(b) holds—

(i) a promote licence in its promote period; or

(ii) an innovate licence in phase A of its initial term.

(4) A licensee to whom the criteria referred to in paragraph (3)(a) apply is liable to pay the non-production levy discounted by 80 per cent in respect of that licence.

(5) A licensee to whom the criteria referred to in paragraph (3)(b) apply is liable to pay the non-production levy discounted by 90 per cent in respect of that licence.

(6) Where the licensee is more than one person—

(a) the liability under this regulation is joint and several, and

(b) the licensee is only a micro-enterprise for the purposes of paragraph (3) if every person who is the licensee is a micro-enterprise.

(7) In this regulation—

“innovate licence” means an offshore production licence in which, in accordance with the model clauses, the initial term of the licence (within the meaning of the licence) is divided into phases;

“micro-enterprise” has the meaning given in article 2(3) of the Annex to Commission Recommendation 2003/361/EC of 6th May 2003 concerning the definition of micro, small and medium-sized enterprises( 10 );

“model clauses” means model clauses prescribed by the Petroleum Licensing (Production) (Seawards Areas) Regulations 2008( 11 );

“promote licence” means an offshore production licence in which, in accordance with the terms of the licence—

Calculation of production levy and non-production levy

5. —(1) For the purposes of regulation 3, the OGA must calculate the production levy in accordance with the formula—

(2) For the purposes of regulation 4, the OGA must calculate the non-production levy in accordance with the formula—

(3) In this regulation—

“C” is £22,750,000, which are the leviable costs for the relevant charging period;

“N100” is the total number of licences for which a licensee is liable to pay the non-production levy under regulation 4(2);

“N90” is the total number of licences for which a licensee is liable to pay the non-production levy under regulation 4(5);

“N80” is the total number of licences for which a licensee is liable to pay the non-production levy under regulation 4(4); and

“P” is the total number of offshore production licences for which a licensee is liable to pay the production levy under regulation 3(2).

Payment of the levy

6. Where a licensee is liable to pay a levy to the OGA in accordance with these regulations, the OGA must notify the licensee in writing by 31st May 2018 as to—

(a) whether the licensee is liable for the production levy or the non-production levy;

(b) the amount so payable;

(c) the date by which that amount is to be paid, being a date not less than 30 days after the date of the notification; and

(d) details of how the payment can be made.

Interest payable on late payment of the levy

7. —(1) Where any amount of a levy notified to a licensee is not paid in accordance with the notification under regulation 6, the licensee is liable to pay to the OGA interest calculated in accordance with paragraph (2) on the amount of the levy which remains unpaid.

(2) The interest payable under paragraph (1) is simple interest calculated from day to day on the unpaid amount from the date by the amount is required until the date when payment is made, at a rate of five per cent over the Bank of England base rate from time to time.

(3) For the purpose of this regulation, the “Bank of England base rate” means—

(a) the rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets, or

(b) where an order under section 19 of the Bank of England Act 1998( 12 ) (reserved powers) is in force, any equivalent rate determined by the Treasury under that section.

Recovery of the levy

8. Where any amount of the levy notified to a licensee is not paid in accordance with the notification under regulation 6, that unpaid amount, together with any interest due in accordance with regulation 7, is recoverable as a civil debt due to the OGA.

Repayment or credit of the levy under these Regulations

9. —(1) This regulation applies where the total amount of the levy exceeds the leviable costs in respect of the relevant charging period.

(2) Where this regulation applies, after the relevant charging period the OGA must divide the leviable costs by the total amount of the levy to 3 decimal places to give the relevant multiplier.

(3) The OGA must then adjust the levy payable by a relevant person (“the original levy”) by multiplying the amount of the original levy by the relevant multiplier to give the new levy figure payable by that person for the relevant charging period (“the new levy”).

(4) The new levy is to be substituted for the original levy in any notification given, or to be given, under regulation 6, and regulation 7 is to be construed accordingly.

(5) If a relevant person to whom a notification is given under regulation 6 pays more than the new levy, the OGA must, by 31st December 2019, pay to the person the difference between the new levy and the amount the person actually paid (after deducting any repayment of this amount that has already been made).

(6) In this regulation—

“relevant person” means a person who is liable to pay a levy under either regulation 3 or 4 of these Regulations (and includes a person who has discharged that liability in whole or in part); and

“total amount of the levy” means the total amount notified to licensees under regulation 6.

PART 3 Pollution Prevention and Control (Fees)

Amendments to the Pollution Prevention and Control (Fees) (Miscellaneous Amendments and Other Provisions) Regulations 2015

10. In the Pollution Prevention and Control (Fees) (Miscellaneous Amendments and Other Provisions) Regulations 2015( 13 )—

(a) in the heading of regulation 5, for “regulation 49 of the Offshore Marine Conservation (Natural Habitats etc. ) Regulations 2007( 14 )”, substitute “regulation 55 of the Conservation of Offshore Marine Habitats and Species Regulations 2017( 15 )”;

(b) in regulation 5(2), for “regulation 49 (power to grant licences) of the Offshore Marine Conservation (Natural Habitats etc.) Regulations 2007”, substitute “regulation 55 (power to grant licences) of the Conservation of Offshore Marine Habitats and Species Regulations 2017”, and

(c) in regulation 7(3) (calculation of fees), in paragraph (a) of the definition of “specialist officers”, for “5”, substitute “5B”.