‘Huge swing in North Sea oil revenues’ suggests tax fiddle

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‘From Energy Voice today: A huge swing in North Sea oil revenues suggests the sector is “alive and well”, an industry chief said. UK Government revenues from oil production climbed to £1.18 billion in 2017-18, from the previous record low of minus £316 million the previous year, new figures from HMRC show.’

https://www.energyvoice.com/oilandgas/north-sea/175635/north-sea-alive-and-well-as-tax-receipts-back-to-black/

Now, a swing from minus £316 million to plus £1.18 billion may seem a lot, even ‘huge’ but it’s not against the background of oil prices soaring from $27.67pb in 2016 to around $80pb today and with $100pb on the cards. See this for evidence:

A fifth prediction of oil rising to $100 per barrel for Scottish oil, suggests pre-tax revenue of around $1 trillion!

So even at $80pb how much should the Treasury be taking in? Here’s an adaption of an earlier piece working it out:

Remember the OBR, a George Osborne creation, regularly forecast doom and despair for an independent Scotland back in 2014. These same forecasts were widely and gleefully used by our Unionist media. Here’s how Energy Voice reported the story in March:

‘A new (OBR) report predicts UK oil and gas revenues will be £400million higher every year from now until 2023 – in the latest sign that the North Sea is on the mend. In its fiscal and economic outlook, the Office for Budget Responsibility (OBR) said its revenue forecast had been revised upwards due to higher oil prices, increased production and lower costs. The Oil and Gas Authority recently lifted its long-term forecast [to 2050] for North Sea production by 2.8billion barrels of oil equivalent to 11.7billion barrels.’

They then predict tax revenues of £1 billion for each of the next five years. It was £1.18 billion in 2018, according to HMRC.

https://www.energyvoice.com/oilandgas/north-sea/166095/obr-pushes-north-sea-revenue-projections/

Only £1.18 billion? Nuts!

Here’s how I do the sums:

Even if we accept the conservative 11.7 billion barrels to 2050, at $80 per barrel, that equals total revenue of $936 billion! Production costs estimated by the BP chief, last year, to be no more than $15 per barrel equal $175 billion. So that’s $761 billion or £578 billion, in profit, before wages and shared dividends yet the OBR thinks we only get £1 billion in tax revenue per year. Isn’t that a bit low? UK corporation tax at 20% would give us more than £115 billion to 2050 or £3.6 billion per year. What’s going on here?

Finally, there have been new discoveries since then and there will be, no doubt, more in the years to come.

Let’s not throw this away a second time. Westmonster will just use it to cover the costs of Brexit.

 

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11 thoughts on “‘Huge swing in North Sea oil revenues’ suggests tax fiddle

  1. Stuart Mcnicoll July 2, 2018 / 2:05 pm

    Last year the UK gov allowed £27.2 billion of Corporation tax to be kept by the oil companies. Bearing in mind that £27.2 Billion represents just 40% of net profit for those Companies. Of course giving it away did allow the media to claim that the industry made a loss. Also bear in mind that Shell, just 1 of the partners in Norway’s industry paid £2.7 billion to the Norwegian Treasury in the same year and paid out over £11 Billion to its shareholders. Now that either makes Westminster totally unfit to run piss up in a brewery, or just plain corrupt.

    Liked by 3 people

  2. Gordon July 2, 2018 / 5:47 pm

    WM proclaimed 2014 oil revenues as just £1.76 Billion and 2015 as even less, £588 Million.

    Total for 2 years, £2.348 Billion.

    Except, that was not true, nor remotely accurate.

    HMRC changed the way Public revenue was accounted and helpfully gave an example of how “extro-regio” (off book) accounting, “changed the look” of the revenues, using, of all things…oil revenues !!

    The 2014 figure became £10.6 Billion and 2015 became £6.8 Billion.

    £17.4 Billion instead of the WM claimed (and GLEEFULLY claimed) £2.348 Billion.

    £15,000,000,000 made from oil and gas that WM “forgot” to tell us about.

    That is 6 times more and 11.5 times more respectively !!

    Quite the deliberate lie huh?

    Liked by 1 person

      • Bob Nugent July 4, 2018 / 8:31 am

        Just read an article about bbc being awarded the vacant Scottish TV channel slot,due to stv2 closing
        DID OFCOM OFFER THIS TO INDEPENDENT COMPANIES
        IF NOT WHY NOT

        Like

  3. Bob nugent July 2, 2018 / 9:00 pm

    RETAIN ALL THESE FACTS AND HIT THE UNIOISTS WITH THEM WHEN THEY SAY
    SCOTLAND ARE TOO WEE AND POOR
    WE IS BLOODY RICH TELL EVERYONE WHO IS INTERESTED IN THEIR CHILDRENS FUTURE
    TGAT RULES OUT AL YOON AN LOONS

    Liked by 2 people

    • Bob Nugent July 4, 2018 / 9:57 pm

      Hi Tried to send message via site did not work. Not sure if you have noticed that stv2 Has gone off air. I also noticed a New Channel is coming around August Named “thatsscotland” On digging around I discovered this is a front for BBC SCOTLAND I HAVE ASKED OFCOM TO CONFIRM

      Sent from my iPad

      >

      Like

  4. Stuart Mcnicoll July 2, 2018 / 9:18 pm

    Forgot to add that Scotland’s oil revenue based on our knowledge of how Westminster cooks the books, should really be forecast for 2018 as north of £30 billion in Corporation tax.

    Liked by 2 people

  5. Uisdean mor July 4, 2018 / 7:55 am

    Thanks guys. Keep up the good work.

    Liked by 1 person

  6. Marlene July 8, 2018 / 4:37 pm

    After leaving a comment on your June post about Scotland having 8% of the population, 9% of the UK exports and only 5% of the UK imports, I had a geeky few days trying to follow up my doubts about how HMRC allocates exports to the geographical regions of UK. It has resulted in a much longer post on my own blog particularly about how HMRC allocate mineral fuels (oil, gas, coal). Putting it in a nutshell, out of £500billion of export trade value over the 20 years 1996-2017, only £66billion was allocated to Scotland. In 2013, it’s clear that HMRC changed their methodology. But in 2017 still only 33% of fuel exports were allocated to us. I’m flabbergasted. Post is here : http://paleblueplanet.net/?p=3424

    Like

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