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Taxation (Oilfields)

Volume 887: debated on Tuesday 4 March 1975

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asked the Chancellor of the Exchequer (1) in the light of the statement on petroleum revenue tax of Tuesday 25th February, if he will give for major oilfields—600,000 barrels per day—with similar characteristics of quality, capital and revenue cost and income, the comparable levels of tax and retained profit in Norway, the USA and the United Kingdom.

A comparison of this sort involves arbitrary assumptions about the characteristics referred to in the question; but the purely illustrative figures given in the Treasury Press Notice of 25th February for a field with reserves of 100 million tons—say 200,000 barrels per day—indicated a total Goverment take—including royalty—in the United Kingdom amounting to 71 per cent. of net revenue—that is, gross revenue less capital expenditure and operating costs. For a field of 600,000 barrels per day, assuming that the proportion of costs to gross revenue was the same, the figure would be somewhat higher.Full details of the new Norwegian tax proposals are not yet available; and although new tax proposals of some complexity have been put forward in the United States of America I understand that they are still the subject of discussion. At present, therefore, it is not possible to make a reliable comparison of the kind asked for by the right hon. Gentleman.