§ Mr. Skeetasked the Chancellor of the Exchequer whether he has assessed the effect of the tax changes in the Finance Bill upon the recovery of oil by secondary recovery methods.
§ Mr. WakehamIn nearly all North Sea oilfields currently under development, secondary recovery methods—such as gas or water injection—are used from the outset. This is something of which we took full account when we examined the likely effect on both present and likely future developments of this year's Finance Bill changes to oil taxation. Our conclusion was that, under our proposals, the general level of return on investment should continue to make further development of the North Sea worth while.
In addition, a specific benefit of the abolition of SPD and the introduction of APRT is that the post-tax return to additional expenditure on a field after the initial development—including expenditure on both additional secondary recovery and tertiary recovery—will be improved.