Taxation of oil and gas revenues: the United Kingdom

Three factors helped make the United Kingdom (UK) upstream energy taxation what it is: (1) the physical conditions and real economies of oil and gas projects, (2) the role of oil and gas development in the UK economy up to now, and (3) the history of company and government interaction on petroleum tax and price matters, the two differing over how today's proceeds should be shared. Analysis of present tax policy shows it to be at a stage where the nation, the government, and the oil companies will separately and jointly get less from the North Sea than they could. To correct this requires a better understanding by the government of the operational prospects facing oil companies, and a better understanding by the companies of what the government is trying to do. 3 references, 2 tables.