Abstract
Forecasting the magnitude of future government income from North Sea oil is an undertaking which can be best described, with considerable understatement, as being fraught with difficulties. There are so many variables to take into account and changes in any of them may dramatically affect both the level and the timing of the tax revenue flows. More specifically, even if all potential sources of oil from the North Sea could be identified and the reserves recoverable therefrom ascertained with certainty, accurate prediction would still require a detailed knowledge of the following
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It is now believed that the Cormorant field, instead of consisting of two distinct reservoirs — South Cormorant and North Cormorant — is in fact contiguous and should, therefore, be treated as a single field for taxation purposes.
The figure of 11,949 million barrels refers to an estimate — current during mid-1981 — of ultimate recoverable reserves from the aforementioned fields. Estimates of recoverable reserves and depletion rates for individual fields are, however, regularly subject to considerable revision and for the purposes of these calculations, more recent forecasts have been used. These predict both a lower level of recoverable reserves and also depletion from some fields continuing into the twenty first century. Hence, the level of oil production expected during the period 1976–2000 is forecast here at only 11,431 million barrels.
‘Gearing’ denotes the proportion of funds which are externally financed.
For an analysis of the effect of different tax regimes — up to and including that incorporating the changes announced in the course of the 1980 Budget — see the article by Homa Motamen and Roger Strange, ‘Oil Revenue Outlook for Britain in the Medium Term’, Energy Policy 9 (No. 1), 14-19 (March 1981).
11,949 million barrels corresponds to an estimate of oil reserves made during mid 1981 of proven recoverable reserves from the North Sea. See Ref. 2 above.
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© 1983 British Institute of Energy Economics
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Motamen, H. (1983). Estimation of UK Government Revenues from Oil. In: Tempest, P. (eds) Energy Economics in Britain. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-7355-1_10
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DOI: https://doi.org/10.1007/978-94-011-7355-1_10
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