All expenses incurred by the petroleum industry for goods having a commercial life or value of more than one year and also the following expenses shall be considered as capital expenses:-
(a) All expenses to the extent not covered by clauses (b) to (f) relating to petroleum operations prior to the date of commercial production.
(b) All expenses related to exploration and prospecting activities performed in the contract area after commercial production and all expenses incurred in drilling, testing and completing development wells and construction of permanent facilities for production, refining, storage and transportation of petroleum.
(c) Expenditures for providing education and training to Nepali citizens.
(d) Fees paid to Government of Nepal for procurement of seismic and other information and reports (e) Expenses incurred in relation to obtaining or transferring rights in accordance with the Petroleum Agreement.
(f) All other capital expenses incurred in petroleum operations in accordance with the petroleum contract after commercial production.