North Sea Oil and Gas

HC Deb 10 December 1980 vol 995 cc373-4W

Mr. Meacher

asked the Chancellor of the Exchequer what has been the Government's annual take from North Sea oil and gas, respectively, at current prices and at 1980 prices each year since 1970; what has been the breakdown each year as between royalties, petroleum revenue tax, corporation tax and other sources of revenue; what forecast is made of each of these sources of revenue at 1980 prices each year to 1985; what percentage of net revenues, after deduction of development costs, is represented by the Government take each year since 1970; and what estimate is made for each year to 1985.

Mr. Peter Rees

[pursuant to his reply, 8 December 1980]: It is not possible to provide separate figures for oil and for gas. Following are the receipts of royalties, PRT and corporation tax from North Sea oil and gas since 1970:

£ million outturn prices
	Royalties	PRT	CT*	Total
1970–71	3	—	—	3
1971–72	6	—	4	10
1972–73	11	—	4	15
1973–74	12	—	3	15
1974–75	15	—	5	20
1975–76	20	—	5	25
1976–77	71	—	10	81
1977–78	228	—	10	238
1978–79	289	183	50	522
1979–80	628	1,435	166	2,229
* Estimated proportion attributed to North Sea oil and gas.

In addition, about £40 million CT in 1978–79 was satisfied by setting off advance corporation tax; the corresponding amount in 1979–80 was £100 million.

Following are the figures in 1980 prices:

£ million 1980 prices
	Royalties	PRT	CT	Total
1970–71	11	—	—	11
1971–72	19	—	13	32
1972–73	33	—	12	45
1973–74	33	—	8	42
1974–75	37	—	12	49
1975–76	38	—	10	48
1976–77	120	—	17	136
1977–78	337	—	15	352
1978–79	386	244	67	697
1979–80	732	1,672	193	2,598

Forecasts for later years depend on a number of factors—including changes in the price of oil, costs and the production programme — which cannot be precisely estimated. For the current year and next year I expect total Government revenues from oil and gas to be as follows (1980–81 prices):

• 1980–81 £4 billion
• 1981–82 £4½ billion–£5 billion

It is not meaningful to express annual Government take as a percentage of annual total North Sea net revenues; total net revenues represent the difference between gross revenues of fields in production and the costs of a wider group of fields including fields which have not reached the production stage.