2DFuture closing‑down expenditure

#### 2D Future closing‑down expenditure (1) A person has future closing‑down expenditure in relation to a petroleum project if: (a) the project terminates on the cessation of one or more production licences; and (b) on that termination, an infrastructure licence comes into force, or continues in force, permitting the use of any part (the licensed property) of the operation, facilities and other things that comprised the project immediately before the termination; and (c) but for the continued use of the licensed property (as permitted by the infrastructure licence) after that termination, the person would have incurred closing‑down expenditure in relation to the project, with respect to the licensed property. (2) The amount of the person’s future closing‑down expenditure is worked out as follows:  where: > bond rate is the long‑term bond rate in relation to the financial year during which the project terminates. > future closing‑down costs is the payments (not being excluded expenditure), whether of a capital or revenue nature, that the person would expect: (a) the person; or (b) another person who becomes responsible for carrying on operations involved in closing down the licensed property; to be liable to make in carrying on operations involved in closing down the licensed property. It includes any environmental restoration as a consequence of closing down the licensed property. > years of operation is the number of years after the termination of the project over which the licensed property is expected to be used as permitted by the infrastructure licence. (3) For the purposes of the definition of future closing‑down costs in subsection (2), if the person intends to make alterations or additions to the licensed property after the termination of the project, the payments referred to in that definition are to be disregarded to the extent that they relate to the alterations or additions. (4) In subsection (2): > year means a period of 12 months. > Note: Example: On the termination of a petroleum project and the coming into force of an infrastructure licence, a person has future closing‑down costs of $1 million. The licensed property is expected to be used as permitted by the infrastructure licence for 10 years, and the bond rate in relation to the financial year in question is 5%. > Note: The amount of the person’s future closing‑down expenditure is: > Note: