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Oil Production Costs

Volume 930: debated on Thursday 21 April 1977

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asked the Secretary of State for Energy what are the most recent estimates for the cost of producing North Sea oil; and how these compare with earlier estimates.

The costs of producing oil vary widely from one oilfield to another and the overall range for the 14 currently commercial fields is now estimated to be $3 to $9 per barrel at 1976 prices. This compares with a range of $2 to $8 at 1975 prices given previously. Both ranges include the cost of exploration, development and operation of the fields including an allowance for the cost of the capital funds employed. Payments to the Government of taxes and royalties—which do not represent a using up of resources—have been excluded in line with normal practice for this sort of calculation.