Statutory Market Values

Where a participator in a U.K. oil field disposes of oil, liquefied petroleum gases (LPGs) and condensate otherwise than by way of a sale at arm's length the disposal is taxed as if it took place at a statutorily defined market value. (For further information see OT05310 of the Oil Taxation Manual).

A separate value is produced for each taxable crude blend that is the subject of non arm's length disposals. These values, which are published biannually eight months after the end of the chargeable period to which they relate, are the result of applying the methodology laid down at OTA75/Sch3to the deal data returned to Oil Taxation Office by participators and their associates. The crucial value is that of Brent blend; the statutory market values for all the other crude blends are produced by adding or subtracting a differential to the Brent value.

The Brent Values table shows the monthly statutory values for Brent over recent periods. Each monthly value represents the average of the volume-weighted daily prices for the month of delivery (as returned to Oil Taxation Office) for each day within a defined reference period. This period starts one month before the month of delivery and ends half way through the month of delivery.

The Forties Values table shows the monthly statutory values for another commonly traded North Sea crude, Forties blend. Sales of this blend are often priced by reference to a differential that is applied to published Brent prices. The monthly statutory values are produced by calculating the volume-weighted average of these Forties-Brent differentials that feature in deals which are returned to Oil Taxation Office. Again, only deals agreed within the defined reference period are included in the calculation.

Any enquiries or comments on the Brent Values should be directed to Andy Parrock Telephone 020 7438 6841 or email.