§ Mr. Laurance Reedasked the Secretary of State for Trade and Industry whether the capital cost of undersea pipelines is included in the assessment of the cost of conveyance to land of oil from the North Sea for the purposes of calculating royalty payments.
§ Mr. Tom BoardmanRoyalty is charged on the wellhead value of petroleum; where sales are made elsewhere the costs of conveyance, which would take into account the capital cost of undersea pipelines, are deductible from the sales value to derive the wellhead value.
§ Mr. Laurance Reedasked the Secretary of State for Trade and Industry if, in his next estimate of potential oil reserves in United Kingdom offshore areas, he will attempt an assessment of reserves in the non-designated parts of the shelf.
§ Mr. Tom BoardmanIn order to make reliable estimates of reserves, extensive seismic surveys together with deep drilling is necessary. In the non-designated parts of the shelf deep drilling has not yet taken place, and any estimate of potential oil reserves there would be necessarily speculative and could be misleading. At the present time, therefore, I do not intend to publish an assessment of these reserves.