Petroleum Industry (Encouragement) (CAP. 327 1

CHAPTER 327

T H E PETROLEUM INDUSTRY
(ENCOURAGEMENT) ACT

Arrangement of Sections
Section

1. Short title. -
2. Interpretation.
3. Ratification of Agreement.
4. Cabinet may make Regulations to implement provisions

of the Agreement not mentioned in this Act, and
which may have retrospective effect, and give
retrospective effect to provisions of the Act.

5. Court to grant injunctions against any person engag-
ing in operations contrary to the provisions of this
Act, Regulations made thereunder or the
Agreement.

6. Exemption from Import and Export taxes, fees, imposts,
tonnage taxes, and all property taxes real or
personal.

7. Tanker discharging at bunkering installation exempt
from harbour dues, wharfage, quay dues, tonnage
dues etc.

8. Exemption from Income Tax.
9. Exemption from foreign currency levy.

10. Exemption from Exchange Control.
11. (1) Terms granted to any third party conducting

petroleum operations which are more favourable
than present agreement to apply to this agreement.

(2) Enterprise to be subject to certain non-discriminatory
taxes, fees and imposts.

12. Tax imposed on fuel delivered to certain vessels for
limited time. --

13. Shareholder to be exempt from income tax on dividends
paid by enterprise.

14. Period of monopoly on processing operations and . bunkering operations.

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2 CAP. 327) Petroleum Industry (Encouragement)

15. Extension of time for performance of obligation in event
of war or force majeure.

16. Mode of assignment of enterprise.

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Petroleum Industry (Encouragement) (CAP. 327 3

PETROLEUM INDUSTRY (ENCOURAGEMENT)

(2nd January, 1963. ) 411963.
1311963.

311980.

1. This Act may be cited as the Petroleum Industry short title.
(Encouragement) Act.

2. In this Act, unless the context otherwise requires, Interpretation.
the following expressions shall have the meaninmereby
respectively assigned to them-

" the Agreement7 ' means-

(i) the agreement entered into on the 28th of
March, 1961, by and between the
Administrator of Antigua and the Chief
Minister of Antigua, acting for and on behalf
of the Government of Antigua, and the West
Indies Oil Company Limited entitled "CON-
CESSION AGREEMENT";

(ii) the agreement entered into on the 9th day of
October, 1962, by and between the Minister
of Trade, Production and Labour of Antigua,
acting for and on behalf of the Government
of Antigua, and the West Indies Oil Company
Limited entitled "AGREEMENT WITH
RESPECT T O BUNKERING SUP-
PLEMENTARY AND SUBORDINATE
T O THE CONCESSION AGREEMENT
DATED MARCH 28, 1961";

(iii) the agreement amending the above specified
"CONCESSION AGREEMENT" and
"AGREEMENT WITH RESPECT T O
BUNKERING" entered into on the 15th day
of January, 1980, by and between the Deputy
Premier and Minister of Economic Develop-
ment and Tourism of Antigua, acting for and
on behalf of the Government of Antigua, and

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4 CAP. 327) Petroleum Industy (Encouragement)

National Petroleum Limited entitled "PUR-
CHASE AGREEMENT";

(iv) the agreement dated the 13th November, 1980,
between the Government of Antigua and
National Petroleum Limited entitled
"ADDENDUM to the Purchase Agreement";

(v) clause 1 of the Agreement (which relates to
marketing) dated 1 l th December, 1981 be-
tween the Government of Antigua and
Barbuda, the Antigua National Oil Company,
National Petroleum Limited and Inter
Maritime Bank entitled "PROTOCOL O F
AGREEMENT";

"Antigua and Barbuda" includes the territorial sea
thereof;

"bunkering" means the right to import, export, store,
sell, blend and deliver marine goods and products
from, on or through the Company's bunkering
installation, but shall not include the delivery of
gasolene, benzene, jet fuel, lubricants, greases or
goods of a non-petroleum origin to or aboard any
aircraft, ship or vessel for use in the operation, pro-
pulsion or maintenance thereof;

"bunkering installations" means any plant or facility
at which bunkering is conducted;

"Court" means the High Court or a Judge thereof,
and a Judge of the Court may do in Chambers any
act which the Court is by this Act authorised to do;

"crude oil" means crude petroleum, asphalt and all
liquid hydrocarbons in their natural state or
obtained from natural gas by condensation or
extraction;

"enterprise" means the West Indies Oil Company,
Limited, a company incorporated under the laws
of Antigua and Barbuda, and includes any com-
pany which may legally hold all or a portion of the
rights to which the West Indies Oil Company,

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Petroleum Industry (Encouragement) (CAP. 3 2 7 5

Limited, is entitled pursuant to the Agreement and
this Act;

"marine goods and products" means all fuel, lubricating
oils, greases and other goods which are supplied
by petroleum companies for the operation, propul-
sion or maintenance of ships, vessels and marine
engines and equipment;

G ' material" means any goods, substance, supply, equip-

ment, instrument, tool, machinery, or spare part,
whether in raw, semi-finished or processed
condition;

-.
"natural gas" means wet gas, dry gas and all other

gaseous hydrocarbons produced from oil or gas
wells and the residue gas remaining after extrac-
tion of liquid hydrocarbons from wet gas;

' t operations" means petroleum operations and in

addition thereto any other activities or operations
by the enterprise in Antigua and Barbuda
authorised by the Agreement;

" petroleum" means crude oil and natural gas;

"petroleum operations" means every processing,
transportation or sales operation;

"processing facility" means any plant or installation
at which a processing operation is conducted;

6' processing operation" means the treatment of
petroleum by any means or methods, including the
distillation, condensation, chemical treatment,
refining, separation, blending and compounding
thereof, so as to result in a refined product;

"refined product'' means any finished or semi-finished
hydrocarbon directly or indirectly derived from
petroleum by means of distillation, condensation, . chemical treatment, refining or other means or pro-
cess or any substance so derived in which a finished

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6 CAP. 327) Petroleum Industry (Encouragement)

or semi-finished hydrocarbon is used as an essen-
tial part of the processing charge;

"sales operation" includes the distribution, sale, export
or disposal of petroleum, refined products or marine
goods and products;

" transportation operation7' includes the conveyance of
petroleum from producing fields or terminals to any
processing facility, to distribution facilities, to other
transportation facilities or to seaboard and the con-
veyance of petroleum or refined products from any
processing facility to any such point; the storing
of petroleum or refined products and the delivery
of petroleum or refined products by any means
including loading on board ship.

(2) Reference in this Act to any law or to any provi-
sion of any law shall, unless the context otherwise requires,
include any amendments to such law or provision and to
any law or provision thereof replacing the same. References
in this Act to any particular Act shall include references to
any subsidiary legislation made under that Act.

Ratification of
Agreement.

3. The Agreement is hereby ratified and confirmed.
The failure in this Act to implement any provision of the
Agreement shall not constitute any derogation of such pro-
vision or any part thereof, and accordingly, the terms of the
Agreement shall remain in every respect fully effective.

Cabinet may
make Regulations

4. (1) The Cabinet may make Regulations-
to implement
provisions of the (a) giving effect to the provisions of this Act; and
Agreement not
mentioned in this ( b ) implementing the Agreement (in a manner not
Act, and which
may have

inconsistent therewith) with respect to any matter for
retrospective which no provision is made in this Act.
effect, and give
retrospective
effect to (2) Without prejudice to the generality of the provisions
provisions of the of section 3 of this Act, or the powers conferred by subsec-
Act.

tion (1) of this section, Regulations may be made under the
preceding subsection specifying-

(a) the steps which may be taken, and the persons
by whom they may be taken, to prevent a breach of

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Petroleum Industy (Encouragement) (CAP. 327

any of the provisions of the Agreement, this Act or any
Regulations made thereunder, to assure to the enter-
prise the rights and privileges accorded by the Agree-
ment, this Act or any Regulations made thereunder;

(6 ) the punishment upon summary conviction of
any person found guilty of any breach of the provisions
of the Agreement, this Act or any Regulations made
thereunder:

Provided that in respect of any such breach, no
provision shall be made for the imposition of a fine
exceeding fifteen thousand dollars o r of imprisonment
exceeding six months or for the imposition of both a -
fine and imprisonment;

(c) the punishment upon summary conviction of
any person found guilty of violating or impeding the
exercise of any right or privilege assured to the enter-
prise by the Agreement, this Act or any Regulations
made thereunder:

Provided that in respect of any such breach, no
provision shall be made for the imposition of a fine
exceeding fifteen thousand dollars or of imprisonment
exceeding nine months or for the imposition of both a
fine and imprisonment;

(d) that the provisions of any law (other than this
Act), so far as is necessary for the purposes of subsec-
tion (1) of this section shall not have effect, or shall have
effect with such restrictions or modifications as may be
necessary.

(3) Regulations made under the preceding provisions
of this section may be made to have retrospective effect. The
Cabinet may also make Regulations to give retrospective
effect to any of the provisions of this Act in so far as Cabinet
may deem it necessary and expedient so to do, for the pur-
pose of implementing the Agreement.

(4) Regulations made under subsection (3) of this sec-
'tion and having or giving retrospective effect may be made
to apply either generally or to any particular case or class

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8 CAP. 327) Petroleum Industry (Encouragement)

of case, and may make different provisions in respect of dif-
ferent cases or classes of cases, and may provide for inciden-
tal and consequential matters and may contain conditions,
exceptions and qualifications.

(5) All Regulations made under this section shall be
laid before Parliament as soon as may be after they are made,
and if a resolution is passed by Parliament that the said
Regulations be annulled, they shall henceforth be void, but
without prejudice to the validity of anything previously done
thereunder or to the making of new Regulations:

Provided that no new Regulations identical in effect with
the Regulations so annulled shall be made within three
months from the date on which such Regulations were
annulled by resolution of Parliament.

Court to grant 5 . The Court upon the application of the Attorney-
injunctions against
any General or the enterprise may issue an injunction restrain-
engaging in
operations
contrary to the
provisions of this
Act, Regulations
made thereunder
or the
Agreement.

ing any person from engaging in any operation in respect
of which the enterprise has been accorded an exclusive right
or privilege under the provisions of the Agreement, this Act
or any Regulations made thereunder:

Provided that any relief granted by way of injunction
against the infringement of any such right or privilege shall
cease to have effect on the expiration of the period in respect
of which such right or privilege was granted, or on the 28th
day of March, 2001, whichever sooner occurs.

Exemption from 6. Notwithstanding anything to the contrary contained
Import and
Export taxes, in any law for the time being in force-
fees, imposts,
tonnage taxes,
and all property
taxes real or
personal.

(i) the enterprise shall during the period commen-
cing on March 28, 1961 and terminating on
April 3, 2008, be entitled to import and export
petroleum, refined products and raw materials;
including chemicals and catalysts, entering
into, resulting from or forming a part of any
processing operation, and any marine goods
and products, free of any and all import and
export taxes, fees, imposts, tonnage taxes or
customs duties;

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Petroleum Industry (Encouragement) (CAP. 327 9

(ii) the enterprise or any contractor to the enter-
prise, other than an assignee under the provi-
sions of section 16 of this Act, shall during the
period commencing on March 28, 1961 and
terminating on March 28, 1991, be entitled
to import and export any material required
with respect to the construction, operation,
alteration, reconstruction, extension, or repair
or any processing facility or any bunkering
installation of the enterprise or for equipping
any such processing facility or bunkering
installation or for the efficient conduct of any
operations of the enterprise in Antigua and
Barbuda, free of any and all import =export
taxes, fees, imposts, tonnage taxes or customs
duties and any and all property taxes, real and
personal:

Provided that, should the enterprise, or any contractor
to the enterprise, or any assignee referred to in section 16
of this Act-

(a) sell or dispose of (otherwise than among
themselves) any material which has been imported free
of customs duties, taxes,, fees and other imposts, or

( b ) use such material for any purpose other than
in connection with an operation authorised by the
Agreement

then the enterprise shall be liable to pay the Government
any customs duties, taxes, fees, or other imposts which would
have been payable on such material if it had been imported
in the condition in which it is or was at the time of such
improper sale, use or other disposition thereof.

7. During the period commencing March 28, 1961 zzk;fging at
and terminating on March 28, 2001, all tankers discharging bunkering
or loading cargo at any bunkering installation of the enter- zez$,i;,",
prise shall enjoy total exemption from harbour dues, whar- harbour dues,
fage, quay dues, tonnage dues and all other charges (except ;,h~~",=~!;,"y
charges for physical port services actually rendered and due,, .t,.
lighthouse dues).

\ 8. The enterprise for a period commencing on Exemption from
Income Tax.

March 28, 1961 and terminating on April 3, 1998, shall be

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10 CAP. 327) Petroleum Industry (Encouragement)

free of any and all taxes on its income or profits. There shall
be calculated in accordance with sound accounting practices
any operating loss which may exist at the expiration of the
period ending April 3, 1998, which loss may be applied
against income or profits in succeeding years until exhausted:

Provided that no such loss shall be carried forward
beyond five years from the end of the fiscal period during
which the loss originated. The enterprise may charge to an
operating account costs incidental to the training of its per-
sonnel and to the carrying out of any benefit or pension plan
on behalf of its employees.

Exemption from 9. The enterprise is hereby exempt from the provi-
foreign currency
levy. sions of section 3 of the Foreign Cdrrency Levy Act.
Cap. 175.

Exemption from
Exchange

10. The enterprise is hereby exempt from the provi-
Control. sions of the Exchange Control Act.
Cap. 157.

Terms granted to
any third party
conducting
petroleum
operations which
are more
favourable than
present
agreement to
apply to this
agreement.

1 . (1) If the Government enters into a legally
enforceable agreement with a third party the terms of which,
insofar as they pertain to petroleum operations, are different
from the terms of the Agreement or are more favourable
to such third party than are the terms of the Agreement to
the enterprise, the enterprise may, at its option, elect to have
such terms applied to it, and upon such election such terms
(and all tax exemptions therein contained) shall thereafter
be applicable to the enterprise:

Provided that the Government shall not thereby become
liable to pay to the enterprise any public funds or to provide
any other direct financial aid to the enterprise other than
such tax exemptions. The enterprise shall not be liable to
any tax upon its earnings which may be retained by the enter-
prise, after provision has been made for the payment of any
taxes on its income or profits, or upon dividends paid or
payable to the shareholders of the enterprise out of the capital
of the enterprise or such retained earnings.

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Petroleum Industy (Encouragement) (CAP. 32 7 11

(2) Except to the extent specified in this Act, the enter- ~;dj ' ;~ts , 'c~r~n
prise shall be subject to- non-

discriminatory
(a) non-discriminatory taxes, fees or imposts of taxes, fees and

general application which may be levied by the Govern-
ment including, without limiting the generality of the
foregoing, taxes required to be withheld with respect
to salaries paid to personnel or payments to contractors
or agents for work carried out in Antigua and Barbuda,
and

(b) non-discriminatory charges and fees for services
rendered to the enterprise by the Government either
at the request of the enterprise, or rendered to the enter-
prise as a member of the general public, an.d

(c) non-discriminatory taxes and fees of general
application, such as, documentary stamp taxes, vehicle
registry fees, civil and commercial registry fees, and
patent and copyright fees:

Provided that non-discriminatory taxes or fees may be
imposed only upon the sale, transfer or use of refined pro-
ducts where-

(i) such taxes or fees are due from third parties
in Antigua and Barbuda, but the collection
thereof is required of the enterprise, and

(ii) the imposition of such tax or fee is imposed
upon transactions occurring with respect to
such refined products after such products have
been conveyed from the storage facilities on
the discharge side of any processing facility of
the enterprise.

12. During the period commencing on the date of ~ ~ ~ , " ~ ~ , d d 0 ;
completion of a deep-water harbour at Antigua and ter- ,,flain vessels
minating on the first day of the fiscal year durLg which the for limited time.
enterprise shall become liable to pay income tax to the
Government, the enterprise shall pay to the Government
monthly sums to be computed at the rate of twelve cents
East Caribbean Currency for each barrel of fuel delivered
from the enterprise to vessels for bunkering under the Agree-

, ment, except fuel so delivered to vessels owned and operated
by or on behalf of the enterprise in connection with its

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12 CAP. 3 2 7) Petroleum Industry (Encouragement)

Antiguan operations. For the purposes of this section "bar-
rel of fuel" means 42 U.S. gallons of petroleum or refined
products converted to a volume measured at 60' Farenheit
and under standard atmospheric pressure at seal level.

Shareholder to be
exempt from

13. Any income of the enterprise derived from opera-
income tax on tions of the enterprise and distributed as dividends to its
dividends paid shareholders shall be exempt from income tax payable by
by enterprise.

such shareholders whether such dividends are paid or payable
to shareholders of the enterprise out of the capital of the enter-
prise, its earnings or its retained earnings after provision
has been made for the payment of taxes by the enterprise
on its income or profits.

Period of
monopoly on

14. No person, other than the enterprise shall engage
processing in-
operations and
bunkering (a) processing operations within Antigua and
operations. Barbuda during the period commencing on the 28th day

of March, 1961, and terminating on the 28th day of
March, 2001, or

(b) bunkering within Antigua and Barbuda dur-
ing the period commencing on the ninetieth day after
the date on which the enter~rise has advised the Govern-
ment in writing that it is w e ~ a r e d to undertake bunker- " . .
ing in Antigua and Barbuda and terminating on the
28th day of March, 2001.

Extension of time
for performance

15. Where the exigencies of a general war or any force
of obligation in majeure or other occurrence beyond the control of the enter-
event of war prise renders impossible or hinders or delays the performance
force majeure.

of any obligation specified in the Agreement, the Agreement,
and all the time periods set forth herein shall automatically
be extended for the duration of such general war, force ma-
jeure or occurrence:

Provided that such duration is not less than three calen-
dar months.

Mode of
assignment of

16. The enterprise may subject to the prior approval
enterprise. of the Governor-General assign to any person all, or any

part of, the rights, privileges, immunities and exemptions
granted by this Act. The approval of the Governor-General
shall not be unreasonably withheld or unduly delayed. Where

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Petroleum Industry (Encouragement) (CAP. 32 7 13

any such assignment is made, the word "enterprise" where
used in this Act shall be deemed to apply to such assignee;
and such assignee shall not be deemed a third party for the
purposes of this Act.