5Petroleum exploration and recovery in relation to certain areas

#### 5 Petroleum exploration and recovery in relation to certain areas Pre‑1 July 2008 petroleum project (1) For the purposes of the application of this Act (including this section) to a pre‑1 July 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, a production licence area, an exploration permit area or a retention lease area is a reference to exploration for petroleum in, or recovery of petroleum from, the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force. (2) For the purposes of the application of this Act to a pre‑1 July 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, the eligible exploration or recovery area in relation to a petroleum project is a reference to exploration for petroleum in, or recovery of petroleum from: (a) where the production licence or any production licence in relation to the project is a permit derived production licence—the exploration permit area in relation to the exploration permit to which the production licence is related (being exploration or recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); (b) where the production licence or any production licence in relation to the project is a lease derived production licence—the retention lease area in relation to the retention lease to which the production licence is related (being exploration or recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); and (c) the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project. (3) For the purposes of subsections (1) and (2), where, at a time when no permit derived production licence in relation to an exploration permit is in force, a retention lease that is related to the exploration permit comes into force, any exploration for, or recovery of, petroleum that occurred while the exploration permit was in force in the block or blocks in respect of which the retention lease was granted and during the period: (a) where paragraph (b) does not apply—before the retention lease came into force; or (b) where, before the retention lease came into force, a permit derived production licence, or permit derived production licences, in relation to the exploration permit were in force—after that production licence or all of those production licences, as the case may be, ceased to be in force and before the retention lease came into force; shall be taken to have occurred in the retention lease area and not in the exploration permit area notwithstanding that the retention lease was not in force at that time. (4) For the purposes of subsection (2), where, but for this subsection, the same exploration for petroleum or recovery of petroleum would be exploration for petroleum in, or recovery of petroleum from, the exploration permit area or the retention lease area in relation to 2 or more production licences, the exploration or recovery shall be taken to relate only to the production licence that first came into force. Post‑30 June 2008 petroleum project (5) For the purposes of the application of this Act (including this section) to a post‑30 June 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, a production licence area, an exploration permit area or a retention lease area is a reference to exploration for petroleum in, or recovery of petroleum from, the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force. (6) For the purposes of the application of this Act to a post‑30 June 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, the eligible exploration or recovery area in relation to a petroleum project is a reference to: (a) if the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence) derived from an exploration permit (in this paragraph called the prior exploration permit)—exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit, where the exploration or recovery occurred: (i) before the current production licence came into force; and (ii) if, before the current production licence came into force, there came into force one or more retention leases, or one or more other production licences, derived from the prior exploration permit—after whichever of those retention leases or other production licences last came into force before the current production licence came into force; and (b) if the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence) derived from a retention lease (in this paragraph called the prior retention lease)—exploration for petroleum in, or recovery of petroleum from, the retention lease area of the prior retention lease, where the exploration or recovery occurred before the current production licence came into force; and (c) if: (i) the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence) derived from a retention lease (in this paragraph called the prior retention lease); and (ii) the prior retention lease was derived from an exploration permit (in this paragraph called the prior exploration permit); exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit, where the exploration or recovery occurred: (iii) before the prior retention lease came into force; and (iv) if, before the prior retention lease came into force, there came into force one or more other production licences, or one or more other retention leases, derived from the prior exploration permit—after whichever of those other retention leases or other production licences last came into force before the prior retention lease came into force; and (d) exploration for petroleum in, or recovery of petroleum from, the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project. (7) If: (a) paragraph (6)(c) applies to a post‑30 June 2008 petroleum project; and (b) the prior retention lease mentioned in that paragraph is one of a set of 2 or more retention leases that: (i) came into force at the same time; and (ii) were derived from the prior exploration permit mentioned in that paragraph; and (c) the production licence, or the production licences, in relation to one or more other post‑30 June 2008 petroleum projects were derived from one or more of the retention leases included in the set mentioned in paragraph (b) of this subsection; and (d) exploration expenditure incurred in relation to the petroleum project mentioned in paragraph (a) of this subsection is attributable to exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit; then, for the purposes of the application of this Act to the petroleum project mentioned in paragraph (a) of this subsection, the amount of the exploration expenditure mentioned in paragraph (d) of this subsection is taken to be the amount worked out using the following formula:  where: > number of retention leases relating to the petroleum project mentioned in paragraph (a) of this subsection means the number of retention leases: (a) from which the production licence, or the production licences, in relation to the petroleum project mentioned in paragraph (a) of this subsection were derived; and (b) that are included in the set mentioned in paragraph (b) of this subsection. > total number of retention leases means the number of retention leases that are included in the set mentioned in paragraph (b) of this subsection. > unadjusted amount of exploration expenditure means the amount that, apart from this subsection, is the amount of the exploration expenditure mentioned in paragraph (d) of this subsection.