Section 65

(1) This Part shall apply to companies engaged in upstream petroleum
of this Part operations in the onshore, shallow water and deep offshore with licences and
leases under the Petroleum Industry Act.
(2) In this Part –
(a) hydrocarbon tax shall apply to crude oil as well as field condensates
and liquid natural gas liquids derived from associated gas and produced in
the field upstream of the measurement points; and
(b) hydrocarbon tax shall not apply to –
(i) associated natural gas, including gaseous natural gas liquids produced
in the field and contained in the rich gas, and non-associated natural gas,
(ii) condensates and natural gas liquids produced from non-associated
gas in fields or gas processing plants, provided the related volumes are
determined at the measurement points or at the exit of the gas processing
plant, regardless of whether the condensates or natural gas liquids are
subsequently commingled with crude oil, and
(iii) any condensates and natural gas liquids produced from associ-
ated gas at gas processing or other facilities downstream of the
measurement points.
(3) The costs of production of associated gas, upstream of the
measurement point shall be allocated to crude oil for the purposes of calculating
hydrocarbon tax, provided that capital and operating costs for wells solely
producing associated gas-cap gas shall not be allocated to crude oil, but shall
be claimed under Chapter Two of this Act.
(4) This Part shall not apply to a frontier acreage until it is reclassified
under section 68 (3) of the Petroleum Industry Act.
(5) For the purposes of determining royalties, condensates shall be treated
as crude oil and natural gas liquids as natural gas.
(6) Upstream petroleum operations shall in addition to hydrocarbon tax,
be subject to Chapter Two of this Act.