Laws of the People's Republic of China

PROVISIONAL REGULATIONS ON PAYMENT OF ROYALTY FEES
FOR MINING AREAS USED FOR SINO-FOREIGN COOPERATIVE
EXPLOITATION OF LAND OIL RESOURCES

(Issued by the Ministry of Petroleum Industry
on December 14, 1989)

 

SUBJECT: OFFSHORE & ONSHORE EXPLORATION & EXPLOITATION

ISSUING-DEPT: MINISTRY OF PETROLEUM INDUSTRY

ISSUE-DATE: 12/14/1989

IMPLEMENT-DATE: 01/01/1990

LENGTH: 912 words

TEXT:

[Article 1] These Regulations are hereby formulated to promote the development of national economy, enhance international economic and technical cooperation and encourage the exploitation of land oil resources in China.

[Article 2] Chinese and foreign enterprises engaged in the cooperative exploitation of oil resources on land within the territory of the People's Republic of China shall pay royalty fees for using mining areas in accordance with these Regulations.

[Article 3] The royalty fees for using mining areas are computed and imposed separately in accordance with the total output of crude oil or natural gas in each oil or gas field in a calendar year.‰Ã The royalty fees for using mining areas are charged at the following rates:

1.‰Ã Crude oil

No royalty fees are charged for the first 50,000 tonnes of the annual crude oil output;

1% is charged for the range of the annual output of over 50,000 to 100,000 tonnes;

2% for the range of the annual output of over 100,000 to 150,000 tonnes;

3% for the range of the annual output of over 150,000 to 200,000 tonnes;

4% for the range of the annual output of over 200,000 to 300,000 tonnes;

6% for the range of the annual output of over 300,000 to 500,000 tonnes;

8% for the range of the annual output of over 500,000 to 750,000 tonnes;

10% for the range of the annual output of over 750,000 to one million tonnes;

12.5% for the range of the annual output of over one million tonnes.

2.‰Ã Natural Gas

No fee is charged for the first 100 million NCM (normal cubic meter) of the annual output;

1% for the range of the annual output of over 100 million to 200 million NCM;

2% for the range of the annual output of over 200 million to 300 million NCM;

3% for the range of the annual output of over 300 million to 400 million NCM;

4% for the range of the annual output of over 400 million to 600 million NCM;

6% for the range of the annual output of over 600 million to one billion NCM;

8% for the range of the annual output of over one billion to 1.5 billion NCM;

10% for the range of the annual output of over 1.5 billion to 2 billion NCM;

12.5% for the range of the annual output of over 2 billion NCM.

[Article 4] The royalty fees for using mining areas producing crude oil or natural gas shall be paid in kind.

[Article 5] The royalty fees for using mining areas producing crude oi or natural gas are charged and administrated by the tax departments.

The royalty fees for mining areas used for Sino-foreign cooperative exploitation of oil and gas field are withhold by the operators of the oil and gas fields and hadned over to China National Oil Development Corporation for payment.

[Article 6] The royalty fees for using mining areas are calculated yearly and paid in advance in separate period or by instalments.‰Ã The final settlements shall be made after the end of the year.‰Ã The timelimits for advance payments and settlements shall be fixed by the tax departments.

[Article 7] The oil and gas operators shall report quarterly output and forward other relevant materials to the tax departments ten days after the end of each quarter.

[Article 8] For those who withholds and hands over the royalty fees for using mining areas on behalf of the operators must pay the royalty fees before the deadline fixed by the tax departments.‰Ã For delay payment, the tax departments shall impose additional overdue fines computed at daily rate of one thousand per cent the royalty fees for using mining areas starting from the day after the fees are due.

[Article 9] For those oil and gas field operator who violates the provisions of Article 7 and fails to report on time the actual output of oil and gas and send other relevant materials required by the tax department, the tax department may impose, according to circumstances, a fine of less than 5,000 RMB on the operator.‰Ã For any concealment of output, the tax department may impose, according to circumstances, a fine not more than five times the royalty fees for using mining areas, plus the original royalty fees the operator is bound to pay.

[Article 10] The meaning of the following terminologies in these Regulations is defined as follows:

1.‰Ã Crude oil: solid and liquid hydrocarbon in a natural state, including any liquid hydrocarbon extracted from natural gas except CH4;

2.‰Ã Natural gas: non-associated and associated natural gas in a natural state;

Non-associated natural gas: all gaseous hydrocarbon extracted from gas reserve including wet gas, dry gas and residual gas after the extraction of liquid hydrocarbon from wet gas;

Associated natural gas: all gaseous hydrocarbon extracted together with crude oil from gas reserve, including residual gas after the extraction of gaseous hydrocarbon from it;

3.‰Ã The total output of crude oil in a calendar year: the total aomunt of crude oil prodeuced in each oil or gas field in a contracted mining area in a calendar year with deduction of oil used in operations and losses;

4.‰Ã The total output of gas in a calendar year: the total amount of natural gas produced in each oil or gas field in a contracted mining area in a calendar year with deduction of gas used in oil operations and losses.

[Article 11] These Regulations shall be interpreted by the State Administration of Taxation.

[Article 12] These Regulations shall come into force on January 1, 1990.