Section 43

in subparagraph (1), by substituting for the proviso to that paragraph the following proviso:

“Provided that—

the original parties to the petroleum agreement are the same; and

the amount of qualifying exploration expenditure of the first mentioned chargeable person is from an agreement area where chargeable petroleum is not being produced.”;

and

by substituting for subparagraph (2) the following subparagraph:

“(2) The amount of qualifying exploration expenditure incurred by the first-mentioned chargeable person to be allowed as deduction against the gross income of the second-mentioned chargeable person shall be determined in accordance with the following formula:

A x c

B where

A is the gross income of the second-mentioned chargeable person from a petroleum operation;

B is the total gross income of the second-mentioned chargeable person from petroleum operations;

and c is the qualifying exploration expenditure;

and in the case where the qualifying exploration expenditure exceeds the amount of gross income of petroleum operations or the gross income in respect of a petroleum operation of the second-mentioned chargeable person, the excess of the expenditure shall be allowed to be deducted from the gross income of that petroleum operations for the subsequent years of assessment of the second-mentioned chargeable person and any excess thereof shall not be used by another chargeable person in another petroleum agreement where the original parties to the petroleum agreement are the same.”.

Finance 27