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North Sea Oil

Volume 978: debated on Wednesday 13 February 1980

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asked the Secretary of State for Energy what is the latest agreed price for North Sea oil; how this compares with the free market price of comparable oil delivered to Europe on a carriage, insurance, freight basis under (a) national price arrangements and (b) the spot market at Rotterdam; what is the estimated loss of petroleum revenue tax as a result of charging a lower price for United Kingdom oil; and what arrangements he has made for recovering this tax from the Federal Republic of Germany and other countries to which the oil is being supplied.

Following the recent round of increases in OPEC prices negotiations are taking place between producing companies and BNOC on prices for the remainder of the first quarter. In January BNOC had agreed prices based on $29·75 per barrel fob for Forties crude, which would equate with about $30·60 per barrel delivered to Rotterdam This could be compared with a Rotterdam delivered price for slightly higher quality Nigerian crude in January of about $30·80 per barrel, and does not suggest that North Sea oil has been under priced. In recent weeks there has been insufficient trading on the spot market to assess spot as opposed to term prices for comparable oils.