UK Extractive Industries Transparency Initiative (EITI)
Source: data.gov.uk (2021-09-09)

The Extractive Industries Transparency Initiative (EITI) is an international standard for openness around the management of revenues from natural resources. It is designed to improve accountability and public trust for the revenues paid and received for a country’s oil, gas and mineral resources.

The Extractive Industries Transparency Initiative (EITI) reports covering payments and data for the UK extractives sector and a reconciliation of payments made by oil, gas, mining and quarrying companies for the UK extraction of raw materials and government receipts are now available on the [UK EITI website](https://www.ukeiti.org/about-us).

To access the data via the [UK EITI website](https://www.ukeiti.org/publications-reports), please put a tick in the “UK EITI Reports” box and click on the “Filter” box. Each UK EITI payments report will be listed. When you double click on the report title a list of the related data will also be listed and accessible.

UK EITI Report for 2016 
 
April 2018 (updated October 2018) 
 
 
This Report has been prepared by UK EITI Multi-Stakeholder Group (MSG) charged with the implementation of the Extractive Industries Transparency Initiative in the United Kingdom in 
collaboration with the Independent Administrator (IA). This Report has been prepared within the context of EITI reporting and is published for information purposes. The figures included 
within the report have not been subject to specific audit procedures and accordingly neither the MSG nor the IA take responsibility for any loss which may be incurred by any other party, 
should they rely on figures included within this report if such figures were later discovered not to be accurate. 
 
 
 
 
 

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Table of Contents 
FOREWORD .............................................................................................................. 7
Foreword by Andrew Griffiths MP, Minister for Small Business, Consumers and 
Corporate Responsibility................................................................................ 7
INTRODUCTION ........................................................................................................ 8
Extractive Industries Transparency Initiative .......................................................... 8
EITI in the UK ......................................................................................................... 8
Objective ................................................................................................................ 8
Outline of the Report .............................................................................................. 9
1. EXECUTIVE SUMMARY ..................................................................................... 10
1.1. The extractive sector in the UK .................................................................... 10
1.2. Reconciled data ........................................................................................... 11
1.3. Beneficial ownership .................................................................................... 12
2. INFORMATION ON THE UK EXTRACTIVE INDUSTRIES ................................. 13
2.1. The Extractive Industries in the UK ............................................................. 13
2.2. Oil and Gas .................................................................................................. 30
2.3. Mining and Quarrying .................................................................................. 53
2.4. Revenue Allocations .................................................................................... 68
3. APPROACH AND METHODOLOGY .................................................................. 69
3.1. Payment Streams ........................................................................................ 69
3.2. Government Agencies ................................................................................. 71
3.3. Materiality Threshold ................................................................................... 71
3.4. Data Collection, Completeness and Reliability ............................................ 71
3.5. Reconciliation Scope and Methodology ....................................................... 74
3.6. Beneficial Ownership ................................................................................... 76
3.7.  Nature and extent of IA work ....................................................................... 76
3.8.  Recommendations ....................................................................................... 77
4. RECONCILIATION RESULTS ............................................................................ 78
4.1.  Reconciled Extractive Payments to Government in 2016 by Oil & Gas 
companies ................................................................................................... 78
4.2.  Reconciled Extractive Payments to Government in 2016 by Other Mining & 
Quarrying companies .................................................................................. 79
5. IA’S RECOMMENDATIONS TO THE MSG ........................................................ 81
5.1.  Lessons Learned from the 2016 EITI Reconciliation Exercise ..................... 81
ANNEXES ................................................................................................................ 83
Annex 1: Beneficial Ownership ............................................................................ 84
Annex 2: Reporting Templates ............................................................................. 85

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List of Tables 
 
Table 1. EITI Timeline in the UK ................................................................................ 8 
Table 2. Detailed Extractive Industries Payments to/refunds from UK Government in 
2016 ......................................................................................................................... 11 
Table 3. Extractive Industries Payments to/refunds from UK Government in 2016 .. 12 
Table 4. Gross Value Added (GVA) (£ million) ......................................................... 14 
Table 5. Mining and Quarrying (including Oil and Gas) – number of enterprises, GVA 
and employment costs in 2016 ................................................................................. 15 
Table 6. UK Government Revenues from Upstream Oil and Gas ............................ 17 
Table 7. Differences between reconciled EITI amounts and HMRC statistics .......... 19 
Table 8. Value of Mining and Quarrying (including Oil and Gas) Exports and Imports
 ................................................................................................................................. 21 
Table 9. Volume and Value of Coal, Oil and Gas Exports and Imports .................... 23 
Table 10. Workforce jobs estimates ......................................................................... 24 
Table 11. Extractive Industry Employment in Great Britain and United Kingdom (in 
thousands) ............................................................................................................... 25 
Table 12. Regional distribution of extractives activity ............................................... 26 
Table 13. Volume and value of production of coal, oil and gas, 2012–2016 ............ 33 
Table 14. Direct employment (Great Britain not United Kingdom) (in thousands) .... 38 
Table 15. Total employment supported by the UK Upstream Oil and Gas Industry . 39 
Table 16. Illustrative tax calculation.......................................................................... 44 
 

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List of Figures 
 
Figure 1. Extractive Industry Gross Value Added (GVA) .......................................... 13 
Figure 2. Government Revenues from UK Oil and Gas Production ......................... 18 
Figure 3. UK fossil fuel production and primary energy demand .............................. 27 
Figure 4. Destination of UK oil production and sources of UK oil supply, 2016 ........ 28 
Figure 5. UK monthly gas supply ............................................................................. 28 
Figure 6. Sources of UK gas supply on a rolling 12 month basis ............................. 29 
Figure 7. Brent Spot Price (nominal) ........................................................................ 31 
Figure 8. Gas Spot Price (nominal) .......................................................................... 32 
Figure 9. UK oil and net gas production ................................................................... 33 
Figure 10. UK crude oil production by start-up year of field ...................................... 34 
Figure 11. Upstream oil and gas expenditure, 2000–2016 ....................................... 35 
Figure 12. Recoverable UK oil and gas reserves discovered and produced ............ 36 
Figure 13. Oil & Gas UK and OGA forecasts of future UK oil and gas production ... 37 
Figure 14. Volume and value of net UK oil and gas exports (imports) ..................... 38 
Figure 15. GVA of UK mining and quarrying (excluding oil and gas) 1990–2016 ..... 54 
 

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LIST OF ABBREVIATIONS 
AP 
Accounting Period 
APRT 
Advance Petroleum Revenue Tax 
BBL 
Balgzand–Bacton Line 
BEIS 
Department for Business, Energy & Industrial Strategy 
BGS 
British Geological Survey 
billion 
one thousand million or 109 
BIS 
Department for Business, Innovation and Skills 
BMAPA 
British Marine Aggregate Producers Association 
BO 
Beneficial ownership 
boe 
barrel of oil equivalent 
BOP 
Balance of Payments 
Brent 
as applied to trading, the standard quality of oil in Europe and elsewhere comprising a blend of four 
North Sea crudes from the Brent, Ekofisk, Forties and Oseberg fields 
CNS 
Central North Sea 
CPA (08) 
Statistical Classification of Products by Activity in the European Economic Community 
CT 
Corporation Tax 
DAERA 
Department of Agriculture, Environment and Rural Affairs 
DCLG 
Department for Communities and Local Government 
DECC 
Department of Energy & Climate Change (now part of BEIS) 
DfE 
Department for the Economy 
DRD 
Decommissioning Relief Deed 
DUKES 
Digest of United Kingdom Energy Statistics  
EITI 
Extractive Industries Transparency Initiative 
EU 
European Union 
FA 
Finance Act 
FYAs 
First Year Allowances 
GB 
Great Britain 
GDP 
Gross Domestic Product 
GPA 
Group Payment Arrangement 
GVA 
Gross Value Added 
HM 
Her Majesty’s 
HMRC 
Her Majesty’s Revenue & Customs 
IA 
Independent Administrator  
ISRS 
International Standard on Related Services 
IUK 
Zeebrugge–Bacton Interconnector 
LNG 
Liquefied Natural Gas  
LPA 
Local Planning Authority 
MEA 
Mineral Extraction Allowance 
MMO 
Marine Management Organisation 
MPA 
Mineral Planning Authority 
MPL 
Mineral Prospecting Licence 
MSG 
UK EITI Multi-Stakeholder Group 
mtoe 
million tonnes of oil equivalent 
NAO 
National Audit Office 
NBP 
National Balancing Point 
NIEA 
Northern Ireland Environment Agency 
NPPF 
National Planning Policy Framework 

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LIST OF ABBREVIATIONS 
NRW 
Natural Resources Wales 
NYM 
North York Moors 
OBR 
Office for Budget Responsibility 
OGA 
Oil and Gas Authority 
ONS 
Office for National Statistics 
PEDL 
Petroleum Exploration and Development Licence 
PEP 
Politically Exposed Person 
PMA 
Plant and Machinery Allowances 
PRT 
Petroleum Revenue Tax 
PSC 
People with Significant Control 
QIP 
Quarterly Instalment Payment 
RDA 
Research and Development Allowance 
RFCT 
Ring Fence Corporation Tax 
RFES 
Ring Fence Expenditure Supplement 
SC 
Supplementary Charge 
SEPA 
Scottish Environment Protection Agency 
SoS 
Secretary of State 
SPD 
Supplementary Petroleum Duty 
TCE 
The Crown Estate 
ToR 
Terms of Reference 
UCG 
Underground Coal Gasification 
UK 
United Kingdom 
UKCS 
UK Continental Shelf 
US 
United States 

UK EITI report for 2016 
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FOREWORD 
Foreword by Andrew Griffiths MP, Minister for Small Business, Consumers 
and Corporate Responsibility 
In my capacity as Champion of the Extractive Industries 
Transparency Initiative (EITI) here in the UK, I am delighted 
to commend the third EITI Report. 
The UK has been an active participant in the EITI process 
since 2013, achieving candidate country status in 2014. We 
were, however, instrumental in the establishment of the 
Initiative in 2003 and a succession of governments has 
continued to support its principles and aims since then. The commitment to 
the ongoing promotion of EITI was most recently reaffirmed in the UK’s 
Anti-Corruption Strategy published in December 2017. Our active 
participation in the Initiative is part of the Government’s determination to 
improve corporate responsibility across sectors, building trust and 
confidence that the UK is an attractive place to do business. 
This Report is the culmination of a year’s dedicated work on the part of 
those representatives of industry, civil society and public authorities who 
comprise the Multi-Stakeholder Group which guides and delivers the UK’s 
participation in EITI. It is testament too to the enthusiasm with which 
extractives companies here in the UK have embraced the benefits of 
transparency, continuing to volunteer their time and information to enable 
the production of Reports which provide a comprehensive picture of this 
important industrial sector and its relationships with public bodies. 
I take this opportunity to thank all who have contributed to this latest 
Report. 

UK EITI report for 2016 
 
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INTRODUCTION 
 
Extractive Industries Transparency Initiative 
The Extractive Industries Transparency Initiative (EITI) is a global standard to 
promote open and accountable management of natural resources. It seeks to 
strengthen government and company systems, inform public debate and enhance 
trust. In each implementing country, it is supported by a coalition of government, 
company and civil society organisations working together. 
The EITI was first announced at the World Summit on Sustainable Development in 
Johannesburg in 2002 (the Earth Summit 2002) and was officially launched in 
London in 2003. EITI is currently being implemented in 51 countries around the 
world. 
The EITI Standard sets out the requirements which countries need to meet in order 
to be recognised, first as EITI Candidates and subsequently as EITI Compliant 
country. The Standard is overseen by the International EITI Secretariat, which 
comprises members from governments, extractive companies and civil society 
organisations.1 
EITI in the UK 
The timeline of EITI in the UK is summarised in Table 1 below.2 
Table 1. EITI Timeline in the UK 
Date 
Event 
22 May 2013 
The UK Prime Minister announced commitment to EITI. 
9 July 2013 
A Multi-Stakeholder Group (MSG) was formed to oversee EITI implementation in the UK. 
9 October 2013 
The MSG held its first meeting. 
5 August 2014 
The UK submitted its application to become an ‘EITI Candidate’ country to the EITI Board. 
15 October 2014 
The UK became an EITI candidate country. 
15 April 2016 
First UK EITI Report published. (Period covered: calendar year 2014 / Sectors covered: Oil, Gas, Mining 
and Quarrying.) 
31 March 2017 
Second UK EITI Report published. (Period covered: calendar year 2015 / Sectors covered: Oil, Gas, 
Mining and Quarrying.) 
30 April 2018 
Third UK EITI Report published. (Period covered: calendar year 2016 / Sectors covered: Oil, Gas, 
Mining and Quarrying.) 
1 July 2018 
UK Validation against the 2016 EITI Standard due to commence. 
Objective 
The purpose of this Report is to reconcile the data provided by companies operating 
in the extractive sector with the data provided by relevant Government Agencies. 
                                            
1 Source: https://eiti.org/ 
2 For more information, please refer to the UK EITI website at https://www.gov.uk/guidance/extractive-
industries-transparency-initiative and the EITI website at https://eiti.org/united-kingdom 

UK EITI report for 2016 
 
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The overall objectives of the reconciliation exercise are to assist the UK in identifying 
the positive contribution that the extractive sector is making to the economic and 
social development of the country and to realise their potential through improved 
resource governance that encompasses and fully implements the principles and 
criteria of the EITI. 
Outline of the Report 
The report consists of five chapters presented as follows: 
• 
Executive Summary; 
• 
Information on the UK Extractive Industries; 
• 
Approach and Methodology; 
• 
Reconciliation Results; and 
• 
IA’s Recommendations to the MSG. 
The report incorporates information collected up to 9 April 2018. Any information 
collected after this date has not been included in the report. 

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1. EXECUTIVE SUMMARY 
The Extractive Industries Transparency Initiative (EITI) is a global standard of 
transparency that requires oil, gas and mining companies to disclose their payments 
to government agencies and for the reconciliation of these payments with 
government receipts from these companies. The initiative aims to encourage 
governments to be more transparent in publicising the benefits they receive from 
their country’s natural resources. It also aims to improve public understanding of the 
industries involved and inform public debate over the management of a country’s 
natural resources. 
In May 2013, the UK Government publicly committed to implementing EITI and, in 
October 2014, the UK officially became an implementing country by gaining 
candidacy status. 
EITI is a stakeholder-led initiative, overseen in each implementing country by a Multi-
Stakeholder Group (MSG) comprising representatives from industry, civil society and 
government. The UK MSG is committed to transparency and implementing the EITI 
global standard. It is pleased to present this, the third UK EITI report for publication. 
This report contains detailed information on payments received from extractive 
companies and repayments made to them by UK Government agencies in 2016. 
These relate to a range of revenue streams included within the scope of EITI. The 
report gives a breakdown of the total payments and repayments between the oil and 
gas and mining and quarrying sectors, by the different payment streams and by the 
Government agencies that received those payments. A total of 41 oil and gas 
companies and 17 mining and quarrying companies participated in compiling the 
report with continuing high industry participation. The MSG is grateful to all those 
companies which participated in the process this year and will continue to work 
towards full compliance in future years. 
1.1. The extractive sector in the UK 
The extractive industries comprise mining and quarrying including oil and gas. This is 
an important sector in the UK, contributing a gross value added (GVA) of £21.9 
billion in 2016 to the UK economy. Notwithstanding the significant fall in oil prices 
which reached a trough in 2016, the oil and gas industry accounted for the great 
majority of the sector’s GVA. 
In 2016, the UK was the world’s 22nd largest producer of oil and gas, supporting 
hundreds of thousands of jobs in Scotland and across the rest of the UK. According 
to latest ONS data, the sector was directly responsible for 35,500 jobs with many 
more supported in the industry’s wider supply chain. The dramatic fall in the global 
oil price that started in mid 2014 continued into 2016, with the average price falling 
from $52/barrel in 2015 to $44/barrel in 2016. Although 2016 saw higher production 
and lower expenditure, profitability was lower and, overall, there was a net 

UK EITI report for 2016 
 
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repayment of tax to oil and gas companies. This is discussed in detail in the body of 
the report. 
Mining and quarrying in the UK involves a diverse range of significant mineral 
deposits for construction, industrial and metal uses, as well as coal. Mining and 
quarrying are important regional and rural employers, with 8,500 jobs in quarrying 
and 6,900 in the operation of gravel and sand pits, mining of clays and kaolin in 
2016. 
1.2. Reconciled data 
The two tables below summarise the reconciled extractive industry payments to and 
repayments by UK Government agencies in 2016. All material differences have been 
reconciled. The body of this report explains the methodology used to reach these 
figures, as well as the explanation for repayments and unreconciled figures. 
Table 2. Detailed Extractive Industries Payments to/refunds from UK Government in 
20161
(in £ million) 
Payment stream: 
Petroleum 
Licence 
Fees 
OGA 
Levy 
PRT 
RFCT & 
SC 
Mainstream 
CT 
Payments 
to TCE 
Payments 
to TCE 
Payments 
to CA 
Total 
payments 
  
 
 
 
 
 
 
 
 
Type of payee: 
Oil & Gas 
Oil & 
Gas 
Oil & 
Gas 
Oil & 
Gas 
Other 
Mining & 
Quarrying 
Oil & Gas 
Other 
Mining & 
Quarrying 
Other 
Mining & 
Quarrying 
All 
  
 
 
 
 
 
 
 
 
Recipient: 
OGA 
OGA 
HMRC 
HMRC 
HMRC 
TCE 
TCE 
CA 
All 
  
 
 
 
 
 
 
 
 
Total reported by 
government 
agencies 
62.10 
21.27 -782.29 
241.32 
37.22 
2.53 
22.32 
0.44 
-395.08 
Total reported by 
government 
agencies for out-
of-scope 
extractive 
companies* 
7.75 
1.27 
0.00 
0.13 
4.44 
0.00 
0.11 
0.44 
14.15 
Total reported by 
government 
agencies for in-
scope extractive 
companies 
54.35 
19.99 -782.29 
241.19 
32.78 
2.53 
22.21 
0.00 
-409.24 
Total reported by 
in-scope 
extractive 
companies 
54.35 
19.99 -782.29 
241.20 
32.78 
2.53 
22.22 
0.00 
-409.22 
Net unreconciled 
difference** 
0.00 
0.00 
0.00 
-0.01 
0.00 
0.00 
-0.01 
0.00 
-0.02 
                                            
1 Payments for petroleum licence fees and field-level petroleum revenue tax payments and applicable 
payments to TCE are included in the online disclosure of project level payments and repayments at 
https://www.gov.uk/government/publications/extractive-industries-transparency-initiative-payments-
report-2016 

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Table 3. Extractive Industries Payments to/refunds from UK Government in 2016 
(in £ million) 
Type of payee: 
Oil & 
Gas 
Other 
Mining & 
Quarrying 
All 
All 
All 
All 
All 
  
 
 
 
 
 
 
Recipient: 
All 
All 
OGA 
HMRC 
TCE 
CA 
All 
  
 
 
 
 
 
 
Total reported by government agencies 
-455.07 
59.99 83.37 -503.75 24.85 0.44 -395.08 
Total reported by government agencies for out-of-scope 
extractive companies* 
9.16 
4.99 
9.02 
4.58 
0.11 0.44 
14.15 
Total reported by government agencies for in-scope 
extractive companies 
-464.23 
54.99 74.34 -508.33 24.75 0.00 -409.24 
Total reported by in-scope extractive companies 
-464.22 
55.00 74.34 -508.32 24.76 0.00 -409.22 
Net unreconciled difference** 
-0.01 
-0.01 
0.00 
-0.01 
-0.01 0.00 
-0.02 
* Out-of-scope companies comprise those out of scope of the reconciliation because their payments were below 
the agreed materiality thresholds and those with material payments that declined to participate in the 
reconciliation process. 
** All net unreconciled differences are below the materiality deviation agreed by the MSG. 
1.3. Beneficial ownership 
The report includes information on beneficial ownership in Section 3.6 and Annex 1 
below. Contributions in this area have shown an increase from last year, with 15 
private companies responding, 8 of which provided relevant information or links. This 
compared with only 6 of 15 private companies providing material beneficial 
ownership information for 2015. 

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2. 
INFORMATION ON THE UK EXTRACTIVE INDUSTRIES 
2.1. The Extractive Industries in the UK 
The extractive sector has made a sizeable contribution to the UK economy for many 
years, supporting substantial added value in downstream industries and related 
supply chains in addition to its direct output. As illustrated in Figure 1, below, by far 
the largest economic contribution comes from oil and gas production even though 
the value of that sector has more than halved in recent years. As with most of the 
other statistics reported in this document, data on GVA are provisional and are 
subject to revision which can result in large changes. The increase in GVA for oil and 
gas extraction in 2016 is out of line with other data (from BEIS on gross revenues 
from oil and gas production1 and from ONS on the sector’s gross operating surplus2) 
which show a decline. There is currently no UK state participation in the extractive 
industries although, for example, the government has recently funded acquisition 
and interpretation of seismic data through the OGA which is of benefit to industry. 
Figure 1. Extractive Industry Gross Value Added (GVA)3 
Source: ONS, UK GDP(O) low level aggregates, published 29 March 2018 
                                            
1 Series on value of indigenous production of oil and gas in DUKES (BEIS, July 2017 - Value balance 
of traded energy (DUKES 1.4-1.6)). 
2 Series LRWX in the ONS quarterly publication on the profitability of UK companies (UKCS 
companies’ gross operating surplus, 
https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/timeseries/lrwx/prof). 
3https://www.ons.gov.uk/economy/grossdomesticproductgdp/datasets/ukgdpolowlevelaggregates 

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In some of the summary information below, coal is grouped with oil and gas (where 
data are available for fossil fuels but not for other parts of the sector). However, for 
most of this chapter, oil and gas (Section 2.2) are treated separately from mining and 
quarrying, including coal (Section 2.3). In addition, it should be noted that the phrase 
“mining and quarrying” as used in UK national statistics embraces the whole UK 
extractive sector including oil and gas production as well as coal production. Mining 
support services are also included in this sector. Some of the data reported below 
include those activities while other data exclude them. 
2.1.1. Value of the sector 
Table 4 below shows GVA for the main components of the mining and quarrying 
sector as reported in UK national statistics. As just noted, this sector includes fossil 
fuel production, other mining and quarrying and mining support service activities, but 
excludes the value of products manufactured with extracted minerals. The table 
covers the years 2012–2016 and gives for each subsector its percentage share of 
total UK GVA in 2016. It also shows the whole sector’s GVA as a percentage of 
national gross domestic product (GDP) for each year.1 
Table 4. Gross Value Added (GVA) (£ million)2 
Year Mining of coal 
and lignite 
Extraction of 
crude 
petroleum 
and natural 
gas 
Other 
mining and 
quarrying 
Mining 
support 
service 
activities  
Total mining and 
quarrying etc 
Total 
GVA 
Total 
GDP 
Total 
 
(A) 
(B) 
(C) 
(D) 
(E) = (A)–(D) 
(F) 
(G) 
(E) / 
(G) 
2012 
359 
22,151 
3,076 
2,811 
28,397 
1,505,718 
1,685,225 
1.7% 
2013 
107 
22,045 
2,855 
2,409 
27,416 
1,564,430 
1,752,554 
1.6% 
2014 
104 
18,543 
2,911 
2,260 
23,818 
1,638,722 
1,837,062 
1.3% 
2015 
78 
15,309 
2,758 
2,334 
20,479 
1,684,937 
1,888,737 
1.1% 
2016 
34 
17,288 
2,507 
2,039 
21,868 
1,746,628 
1,963,311 
1.1% 
%* 
0.0% 
1.0% 
0.1% 
0.1% 
1.3% 
100.0% 
  
  
  
 
 
 
 
 
 
 
* The percentages in this row are shares of total GVA for all industries in 2016 
 
 
 
 
 
 
 
 
 
Source: ONS, UK GDP(O) low level aggregates, published 29 March 2018. 
The following table gives a finer breakdown of the sector in 2016 to give a sense of 
the scale of activity in each subsector. Although the data in both this table and the 
one above are sourced from official Office of National Statistics (ONS) data, they are 
                                            
1 Generally, in this chapter, unlike in the ONS table and some other official sources, a terminological 
distinction is made between “oil and gas” and “[other] mining and quarrying”, the latter comprising the 
extraction of coal and of all non-hydrocarbon minerals. In this report, as in last year’s, we have 
included mining support service activities in the total for the sector when calculating its contribution to 
GDP. 
2https://www.ons.gov.uk/economy/grossdomesticproductgdp/datasets/ukgdpolowlevelaggregates; 
https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/datasets/unitedkingdomeconomi
caccountsmainaggregates 

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not identical. Note that in value terms support service activities are almost entirely 
related to extraction of petroleum and natural gas. 
Table 5. Mining and Quarrying (including Oil and Gas) – number of enterprises, GVA 
and employment costs in 20161 
SIC 07 
Code 
Description 
Number of 
enterprises 
Approximate 
gross value 
added at 
basic prices 
(aGVA) 
Total 
employment 
costs 
  
Number 
£ million 
£ million 
06 
Extraction of crude petroleum and natural gas 
140 
8,128 
2,420 
09.1 
Support activities for petroleum and natural gas extraction  
240 
1,304 
1,685 
08.11 
Quarrying of ornamental and building stone, limestone, 
gypsum, chalk and slate  
236 
857 
381 
08.12 
Operation of gravel and sand pits; mining of clays and kaolin 
172 
908 
366 
08.92 
Extraction of peat  
18 
25 
12 
08.93 
Extraction of salt  
7 
60 
24 
09.9 
Support activities for other mining and quarrying 
132 
12 
24 
B 
Mining and quarrying 
1,207 
11,391 
6,189 
  
 
 
 
Source: Annual Business Survey; Release Date 9 November 2017 
 
 
2.1.2. Government revenues 
UK Government accounts cover a financial year running from April–March rather 
than a calendar year, so some of the data on government revenues reported in this 
chapter are of necessity on a financial year basis. Where possible, calendar year 
data are (also) provided (as in Table 3. below). The data only relates to the oil and 
gas sector, not mining and quarrying. This is because oil and gas companies have a 
distinct tax regime (see section 2.2.7), whereas mining and quarrying companies pay 
mainstream corporation tax. This means the data for revenue from mining and 
quarrying companies cannot easily be separated out. 
Table 6 includes estimates of the amounts of ring fence corporation tax (RFCT) plus 
supplementary charge (SC) paid annually in respect of UK upstream oil and gas 
production activities, i.e. the exploration and productions stage (described for 
simplicity as “offshore” CT), and of petroleum revenue tax (PRT). UK Government 
accounts are compiled on a financial year basis and the figures reported are 
consistent with annual totals on a cash basis reported in them. 
In addition to the cash receipts series published by HMRC that is tabulated below, 
tax receipts are now also reported by the ONS on an accruals basis.2 The accruals 
basis shows when the tax liability arises, i.e. it matches the taxes arising to taxable 
                                            
1https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/bulletins/uknonfinancial
businesseconomy/2016provisionalresults 
2https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/articles/impro
vementstoaccrualsmethodologyforcorporationtaxbankcorporationtaxsurchargeandthebanklevy/2017 

UK EITI report for 2016 
 
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income as it is earned. There is usually a timing difference between when the tax 
liability arises and when it is paid. Tax is usually paid after the liability arises so the 
tax cash payments in one time period may not match the tax liability for the same 
period. For example, a tax liability of £120 million may arise in one tax year (£120 
million recorded on an accruals basis); this may be paid in three equal instalments, 
two in the same tax year (£80 million recorded that year on a cash basis) with one 
final instalment the next tax year (£40 million recorded in the next tax year on a cash 
basis). Over a longer timeframe, the same amounts are captured by these two 
different mechanisms of recording payments, but in the short term there will be a 
mismatch in amounts. This results in different series being published for corporation 
tax receipts/repayments. Table 6 below therefore also includes receipts on an 
accruals basis. 

UK EITI report for 2016 
 
| P a g e  17 
Table 6. UK Government Revenues from Upstream Oil and Gas1 
Cash (HMRC) 
 
 
 
 
 
£ million 
Total 
Corporation 
Tax 
Of 
which 
offshore 
Petroleum 
Revenue 
Tax 
Total 
Upstream 
Oil and 
Gas 
Total HMRC 
receipts  
Upstream 
Oil and 
Gas Share 
of Total 
(%) 
Calendar Year 
2012 
40,725 
5,847 
2,106 
7,953 
470,766 
1.7% 
2013 
40,417 
3,881 
1,296 
5,177 
489,333 
1.1% 
2014 
41,578 
2,503 
569 
3,072 
506,571 
0.6% 
2015 
44,926 
1,045 
-553 
492 
528,282 
0.1% 
2016 
46,825 
428 
-769 
-341 
554,997 
-0.1% 
Financial Year (April–March) 
2012-13 
40,482 
4,412 
1,737 
6,149 
473,777 
1.3% 
2013-14 
40,327 
3,556 
1,118 
4,674 
493,646 
0.9% 
2014-15 
43,005 
2,026 
77 
2,102 
515,349 
0.4% 
2015-16 
44,410 
713 
-562 
151 
533,686 
0.0% 
2016-17 
49,534 
338 
-654 
-316 
569,336 
-0.1% 
  
 
 
 
 
 
Accruals (ONS) 
 
 
 
 
 
£ million 
Total 
Corporation 
Tax 
Of 
which 
offshore 
Petroleum 
Revenue 
Tax 
Total 
Upstream 
Oil and 
Gas 
Total Public 
Sector 
Taxes 
and NICS 
Upstream 
Oil and 
Gas Share 
of Total 
(%) 
Calendar Year 
2012 
41,226 
4,412 
2,106 
6,518 
555,221 
1.2% 
2013 
41,793 
3,556 
1,296 
4,852 
574,762 
0.8% 
2014 
43,459 
2,072 
568 
2,640 
594,544 
0.4% 
2015 
44,950 
536 
-552 
-16 
617,995 
0.0% 
2016 
52,501 
 
340 
-768 
-428 
653,573 
-0.1% 
Financial Year (April–March) 
2012-13 
41,821 
4,214 
1,737 
5,951 
557,949 
1.1% 
2013-14 
41,642 
3,310 
1,118 
4,428 
580,777 
0.8% 
2014-15 
44,067 
1,544 
77 
1,621 
601,975 
0.3% 
2015-16 
45,593 
410 
-562 
-152 
625,356 
0.0% 
2016-17 
54,528 
613 
-653 
-40 
667,318 
0.0% 
 
 
 
 
 
 
 
Source: HM Revenue & Customs (HMRC), Tax Receipts and National Insurance Contributions 
for the UK, and ONS (Public sector current receipts: Appendix D). 
In addition to taxation, the extractive sector in the UK pays relatively small amounts 
to government by way of licence fees and other levies. These payments are 
summarised later in this report. 
The level of government revenues from taxes on production of oil and gas is 
dependent on rates of taxation and adjusted profitability which is driven by a 
combination of production volumes, commodity prices and cost levels. Historical data 
                                            
1 https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk; 
https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/datasets/appe
ndixdpublicsectorcurrentreceipts  

UK EITI report for 2016 
 
| P a g e  18 
by financial year since 1976/77 on upstream oil and gas taxes, including petroleum 
licence fees, are shown in constant price terms in Figure 2. 
Figure 2. Government Revenues from UK Oil and Gas Production1 
Source: OGA 
In 2016 (and 2016/17), taking RFCT/SC and PRT together, total cash payments 
exceeded total cash receipts. The overall totals reflect both the combination of 
RFCT/SC and PRT and of net payments and receipts by individual companies. The 
overall net repayment reflects the low level of oil (and gas) prices and companies’ 
varying exposure across their portfolios to the four main phases of upstream activity 
(exploration, development, production and decommissioning). A few companies paid 
significant amounts, many paid nothing and some received significant repayments of 
tax paid in previous years. In future years, with the permanent zero-rating of PRT 
from the start of 2016, net PRT receipts will be negative, with the carry-back of 
largely decommissioning-related losses resulting in significant repayments of PRT 
paid in previous years. Net receipts from RFCT/SC exceeded the overall repayment 
of PRT in 2017 and latest official forecasts2 are for continuing net receipts out at 
                                            
1 Oil and Gas Authority (OGA), Government revenues from UK oil and gas production, 
https://www.ogauthority.co.uk/exploration-production/taxation/government-revenues-from-uk-oil-and-
gas-production/ 
2 OBR, Economic and Fiscal Outlook, March 2018, http://obr.uk/efo/economic-fiscal-outlook-march-
2018/. 

UK EITI report for 2016 
 
| P a g e  19 
least until 2022/23, though the outcome after 2017/18 is sensitive to outturn oil (and 
gas) prices, production and expenditure. The overall totals reflect both the 
combination of RFCT/SC and PRT and the combination of net payments or receipts 
by individual companies.  
Differences between reconciled EITI amounts and HMRC statistics 
There are differences between the cash totals reported above for RFCT/SC and 
PRT, based on published HMRC statistics, and the post-reconciliation totals reported 
elsewhere in this report. These totals and the differences, which are explained 
below, are as follows: 
Table 7. Differences between reconciled EITI amounts and HMRC statistics 
(in £ million) Reconciled total Total above Variance 
RFCT & SC 
241 
428 
187 
PRT 
-782 
-769 
14 
The main reasons for the difference between the total of RFCT/SC reconciled for 
EITI and the total published in HMRC statistics are that HMRC statistics are 
provisional (prior to disaggregation and allocation between payments inside and 
outside the ring fence) and do not include interest, which is included within the scope 
of EITI.  
When oil and gas companies make corporation tax payments they are not obliged to 
inform HMRC whether such payments relate to RFCT/SC or mainstream CT. Since 
2014, to assist HMRC in relation to EITI reporting, many companies do report the 
split of payments as they are made to HMRC. Once the tax payment deadline has 
passed and all tax instalments have been received, HMRC’s statistics team 
undertakes work to disaggregate these payments made for a group of companies 
and to re-allocate them into ring fence and non-ring fence payments. HMRC 
statistics are thus provisional and subject to change, often up to 18 months after the 
tax year has ended. For example, there was a significant upwards revision of the 
published RFCT/SC total for 2015 in May 2017 (original net total of £934 million 
revised upwards by £111 million to £1,045 million). This means that a direct 
comparison between reconciled totals for 2016 and the net totals currently published 
in HMRC statistics is of limited value. 
For PRT, the discrepancy is primarily the result of timing differences between 
payments and repayments being made and the date that they are recorded on 
HMRC’s systems. 
Because corporation tax is levied on company level profits and companies can be 
engaged in both extractive and non-extractive activities, it is not possible to identify 
how much CT is paid by other extractive industries (i.e. those engaged in mining and 
quarrying). Estimates of the CT paid by the mining and quarrying sector are 
published annually by HM Revenue & Customs (HMRC) and include oil and gas and 
mining support service activities. They are on a liability basis for financial years 

UK EITI report for 2016 
 
| P a g e  20 
rather than a cash basis for calendar years; the latest published estimate relates to 
2015-16.1 
Income reported from fees for petroleum licences totalled £66,678 million in 2016/17 
(£70.225 million in 2015/16).2 During calendar year 2016, total net licence fees 
actually received were £62,100 million. In 2016, the Coal Authority received £96,569 
in licensing fees and £422,456 in rents, royalties and rights.3 Government revenues 
received in 2016 by TCE for marine aggregate dredging licence and terrestrial 
minerals fees were £24.85 million. 
For more information on the specific tax regimes for oil and gas, and mining and 
quarrying, respectively, see sub-sections 2.2.7 and 2.3.4. 
Section 1064 payments are made (in England, plus equivalent payments made 
elsewhere in the UK) to local authorities relating to the granting of planning 
permission for mining operations to cover, for example, local road and infrastructure 
improvements. These are the only payments currently mandated by Government 
that could possibly constitute social expenditure by extractive companies. 
There are no non-monetary arrangements between extractive companies and the 
government in the UK. 
Forecasts of UK Government oil and gas revenues are published by the independent 
Office for Budget Responsibility (OBR), covering the medium-term budget horizon 
(currently to 2022/23) and longer-term outlook (most recently to 2040/41).5 The OBR 
also publishes details of its underlying forecasts of oil and gas production, prices and 
expenditure broken down between exploration and appraisal, development capital 
expenditure, operating costs and decommissioning costs. 
For projections of future oil and gas production volumes, and the production outlook 
for coal and non-hydrocarbon minerals, see Sections 2.2 and 2.3 respectively. 
                                            
1 HMRC August 2017, Corporation Tax Statistics, Table 11.7, 
https://www.gov.uk/government/collections/analyses-of-corporation-tax-receipts-and-liabilities 
2 Department of Energy and Climate Change (DECC), Annual report and accounts 2015–16, 
https://www.gov.uk/government/collections/decc-annual-reports-and-accounts; Oil and Gas Authority, 
Annual Report and Accounts 2016–17 https://www.ogauthority.co.uk/news-
publications/publications/2017/oga-annual-report-and-accounts-2016-17/. 
3 Source: Coal Authority, email communication. 
4 Section 106 of the Town and Country Planning Act 1990. 
5 OBR, Economic and Fiscal Outlook, March 2018, http://obr.uk/efo/economic-fiscal-outlook-march-
2018/; OBR, Fiscal Sustainability Report, June 2015, http://obr.uk/fsr/fiscal-sustainability-report-june-
2015/ 

UK EITI report for 2016 
 
| P a g e  21 
Total public sector current receipts (excluding public sector banks) in calendar year 
2016 amounted to £711,956 million.1 Net payments to extractive companies were 
£396 million (or 0.1%) of total receipts. 
2.1.3. Exports 
Table 8, below, includes ONS trade data for the mining and quarrying sector 
(including oil and gas) on the value of gross exports, gross imports and net imports. 
The UK both imports and exports all types of mining and quarrying production but is 
generally a net importer of each type. 
Table 8. Value of Mining and Quarrying (including Oil and Gas) Exports and Imports2 
 
Gross Exports 
£ million BOP Basis 
2012 
2013 
2014 
2015 
2016 
Coal 
72 
94 
69 
57 
54 
Lignite 
0 
3 
6 
7 
8 
Coal & lignite 
72 
97 
75 
64 
62 
Crude petroleum 
19,304 
19,365 
17,766 
10,554 
11,997 
Natural gas 
2,473 
2,153 
1,876 
2,266 
1,325 
Crude petroleum & natural gas 
21,777 
21,518 
19,642 
12,820 
13,322 
Iron ores 
7 
5 
3 
3 
1 
Non-ferrous metal ores 
15 
134 
113 
125 
154 
Metal ores 
22 
139 
116 
128 
155 
Unworked stone, gravel, sand etc 
260 
289 
312 
275 
294 
Mining & quarrying products n.e.c 
4,848 
3,768 
655 
580 
820 
Other mining & quarrying product 
5,108 
4,057 
967 
855 
1,114 
 
 
 
 
 
 
Mining & quarrying 
26,979 
25,811 
20,800 
13,867 
14,653 
  
 
 
 
 
Total Goods 
301,621 302,xx-xxxx-xxxx,306 288,770 302,067 
Total Trade 
501,055 519,913 518,925 517,161 554,581 
 
                                            
1 Source: ONS, Public sector current receipts: Appendix D, 21 March 2018, 
https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/datasets/appe
ndixdpublicsectorcurrentreceipts 
2 Source: ONS, UK trade in goods, CPA (08), 14 December 2017, 
https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/datasets/publicationtablesuktr
adecpa08; and ONS, UK trade, 8 December 2017. 
https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/timeseries/ikbi/mret 

UK EITI report for 2016 
 
| P a g e  22 
 
Gross Imports 
£ million BOP Basis 
2012 
2013 
2014 
2015 
2016 
Coal 
2,973 
2,894 
2,262 
1,230 
632 
Lignite 
0 
31 
32 
37 
55 
Coal & lignite 
2,973 
2,925 
2,294 
1,267 
687 
Crude petroleum 
29,934 
25,383 
21,380 
11,665 
10,429 
Natural gas 
9,991 
11,268 
7,139 
6,284 
6,081 
Crude petroleum & natural gas 
39,925 
36,651 
28,519 
17,949 
16,510 
Iron ores 
776 
1,084 
898 
491 
426 
Non-ferrous metal ores 
541 
1,062 
916 
888 
1,017 
Metal ores 
1,317 
2,146 
1,814 
1,379 
1,443 
Unworked stone, gravel, sand etc 
231 
888 
939 
918 
1,036 
Mining & quarrying products n.e.c 
4,330 
3,632 
743 
670 
1,058 
Other mining & quarrying product 
4,561 
4,520 
1,682 
1,588 
2,094 
 
 
 
 
 
 
Mining & quarrying 
48,776 
46,242 
34,309 
22,183 
20,734 
  
 
 
 
 
Total Goods 
410,308 421,952 420,428 407,396 437,562 
Total Trade 
534,419 555,280 555,756 549,531 595,415 
  
Net Imports 
£ millon BOP Basis 
2012 
2013 
2014 
2015 
2016 
Coal 
2,901 
2,800 
2,193 
1,173 
578 
Lignite 
0 
28 
26 
30 
47 
Coal & lignite 
2,901 
2,828 
2,219 
1,203 
625 
Crude petroleum 
10,630 
6,018 
3,614 
1,111 
-1,568 
Natural gas 
7,518 
9,115 
5,263 
4,018 
4,756 
Crude petroleum & natural gas 
18,148 
15,133 
8,877 
5,129 
3,188 
Iron ores 
769 
1,079 
895 
488 
425 
Non-ferrous metal ores 
526 
928 
803 
763 
863 
Metal ores 
1,295 
2,007 
1,698 
1,251 
1,288 
Unworked stone, gravel, sand etc 
-29 
599 
627 
643 
742 
Mining & quarrying products n.e.c 
-518 
-136 
88 
90 
238 
Other mining & quarrying product 
-547 
463 
715 
733 
980 
  
 
 
 
 
Mining & quarrying 
21,797 
20,431 
13,509 
8,316 
6,081 
  
 
 
 
 
Total Goods 
108,687 119,783 123,122 118,626 135,495 
Total Trade 
33,364 
35,367 
36,831 
32,370 
40,834 
  
 
 
 
 
Source: ONS. 
As shown in Table 8, above, the value of UK Exports of Goods and Services 
(Balance of Payments basis) in calendar year 2016 amounted to £554,581 million 
including £14,653 million (or 2.6%) from mining and quarrying. 
Table 9, below, includes data published by BEIS on the volume and value of gross 
exports, gross imports and net imports of fossil fuels (coal, oil and gas). 

UK EITI report for 2016 
 
| P a g e  23 
Table 9. Volume and Value of Coal, Oil and Gas Exports and Imports1 
 
Volume of exports (mtoe) 
 
Value of exports (£ million) 
Year 
Coal 
Oil Natural Gas Oil & Gas  
Coal 
Oil Natural Gas Oil & Gas 
2012 
xx-xxxx-xxxx 
12.384 
46.221  
55 16,435 
2,715 
19,150 
2013 
xx-xxxx-xxxx 
9.429 
45.622  
90 17,460 
2,510 
19,970 
2014 
xx-xxxx-xxxx 
10.998 
44.772  
55 14,625 
2,000 
16,625 
2015 
xx-xxxx-xxxx 
13.716 
50.583  
45 
9,915 
2,310 
12,225 
2016 
xx-xxxx-xxxx 
10.048 
48.228  
50 
8,375 
1,350 
9,725 
 
 
 
 
 
  
 
 
 
 
Volume of imports (mtoe) 
 
Value of imports (£ million) 
Year 
Coal 
Oil Natural Gas Oil & Gas  
Coal 
Oil Natural Gas Oil & Gas 
2012 29.061 66.090 
48.725 
114.815  3,315 31,270 
10,045 
41,315 
2013 32.888 64.489 
47.139 
111.628  3,235 30,010 
10,985 
40,995 
2014 27.581 58.676 
42.041 
100.718  2,260 24,335 
7,635 
31,970 
2015 14.885 55.413 
43.127 
98.540  
985 12,645 
6,990 
19,635 
2016 
5.747 53.380 
45.980 
99.359  
565 11,675 
6,300 
17,975 
 
 
Volume of net exports (mtoe) 
 
Value of net exports (£ million) 
Year 
Coal 
Oil Natural Gas Oil & Gas  
Coal 
Oil Natural Gas Oil & Gas 
2012 -28.693 -32.253 
-36.341 
-68.594  -3,260 -14,835 
-7,330 
-22,165 
2013 -xx-xxxx-xxxx 
-37.710 
-66.006  -3,145 -12,550 
-8,475 
-21,025 
2014 -xx-xxxx-xxxx 
-31.043 
-55.945  -2,205 
-9,710 
-5,635 
-15,345 
2015 -xx-xxxx-xxxx 
-29.411 
-47.957  
-940 
-2,730 
-4,680 
-7,410 
2016 
-5.414 -15.200 
-35.931 
-51.131  
-515 
-3,300 
-4,950 
-8,250 
 
 
 
 
 
  
 
 
 
Source: Digest of UK Energy Statistics 2017. 
2.1.4. Employment 
Table 10, below, gives estimates of the total UK workforce jobs directly supported by 
the UK mining and quarrying sector including its major sub-sectors. It also shows the 
estimates for 2016 as shares of the total workforce jobs for all industries. The 
extractive industries are typically capital- rather than labour-intensive and 
correspondingly represent a significantly smaller share of workforce jobs than of 
GVA. 
                                            
1 https://www.gov.uk/government/collections/digest-of-uk-energy-statistics-dukes 

UK EITI report for 2016 
 
| P a g e  24 
Table 10. Workforce jobs estimates1 
(thousand) 
Mining of coal and lignite; 
Extraction of crude 
petrol/gas [SIC (2007) 
Divisions 05-06] 
Mining of metal ores; 
Other mining and 
quarrying [SIC (2007) 
Divisions 07-08] 
Mining support 
service 
activities [SIC 
(2007) Division 
09] 
Total 
mining & 
quarrying 
etc 
 [SIC (2007) 
Section B] 
Total 
Industries 
[SIC (2007) 
Sections A-T] 
2012 
24 
22 
30 
76 
31,789 
2013 
22 
18 
30 
70 
32,168 
2014 
21 
17 
29 
68 
33,223 
2015 
20 
21 
30 
71 
33,766 
2016 
18 
21 
25 
64 
34,384 
2016 
0.0% 
0.1% 
0.1% 
0.2% 
100.0% 
  
 
 
 
 
Source: ONS, UK labour market statistics: March 2018. 
 
 
 
Table 11 shows estimates of extractive industry employment in Great Britain (GB) 
(i.e. the UK excluding Northern Ireland) at a finer level of disaggregation than is 
available for the workforce jobs estimates for the UK. 
                                            
1https://www.ons.gov.uk/releases/uklabourmarketstatisticsmar2018  
 

UK EITI report for 2016 
 
| P a g e  25 
Table 11. Extractive Industry Employment in Great Britain and United Kingdom (in 
thousands)1 
SIC 2007 
  
2012 
2013 
2014 
2015 
2016 
GB 05101 
Deep coal mines 
3.9 
2.2 
1.6 
0.9 
- 
GB 05102 
Open cast coal working 
2.9 
2.4 
1.3 
1.1 
1.1 
GB 05 
Mining of coal 
6.9 
4.6 
2.9 
2.0 
1.1 
GB 06 
Extraction of crude petroleum and natural gas 
15.6 
15.5 
16.6 
15.7 
15.1 
GB 08110 
Quarrying of ornamental and building stone; limestone; gypsum; chalk 
and slate 
6.9 
4.9 
6.7 
7.4 
8.5 
GB 08120 
Operation of gravel and sand pits; mining of clays and kaolin 
8.7 
7.0 
7.1 
7.7 
6.9 
GB 081 
Quarrying of stone; sand and clay 
15.5 
12.0 
13.8 
15.1 
15.4 
GB 08930 
Extraction of salt 
0.3 
0.3 
0.4 
0.4 
0.3 
GB 08990 
Other mining and quarrying n.e.c. 
2.1 
1.1 
1.1 
1.3 
1.3 
GB 089 
Mining and quarrying n.e.c. 
3.9 
2.4 
2.7 
3.2 
2.5 
GB 08 
Other mining and quarrying (other than mining of metal ores) 
19.4 
14.4 
16.4 
18.3 
17.9 
GB 091 
Support activities for petroleum and natural gas extraction 
22.3 
21.2 
25.1 
22.4 
20.4 
GB 099 
Support activities for other mining and quarrying 
0.6 
0.4 
0.3 
0.4 
0.4 
GB 09 
Mining support service activities 
22.9 
21.6 
25.4 
22.9 
20.8 
GB 05–09 
Total Extractive Industries 
64.8 
56.1 
61.3 
58.9 
54.9 
  
 
 
 
 
 
GB 06, 09 
of which Oil and Gas Extraction and Support Services 
37.9 
36.7 
41.7 
38.1 
35.5 
  
 
 
 
 
 
UK 05, 06 
Mining of coal and lignite; Extraction of crude petrol/gas 
24 
22 
21 
20 
18 
UK 07, 08 
Mining of metal ores; Other mining and quarrying 
22 
18 
17 
21 
21 
UK 09 
Mining support service activities 
30 
30 
29 
30 
25 
UK 05–09 
Total Extractive Industries 
76 
70 
68 
71 
64 
  
 
 
 
 
 
Note: Data for 2014 and 2015 come from the provisional rather than revised results. 
 
 
 
 
 
 
 
Source: ONS, Business Register and Employment Survey (Table 2a). 
All extractive employment shown in the tables above is in the private sector. 
Extractive industry employment levels have fallen markedly from their historic peak 
decades ago, mainly due to the decline of the coal industry, but extractive-related 
activities still contribute significantly to local employment in a number of regions. 
Further details of employment supported directly and indirectly by the oil and gas 
sector are given in Section 2.2 below. 
2.1.5. Regional location of extractive industries 
The broad geographic spread of employment in the UK extractive sector (including 
oil and gas and mining support service activities) is illustrated in Table 12, below. 
The concentration of employment in Scotland reflects the dominance of the 
Aberdeen area in terms of oil and gas-related activity. While the importance of the 
                                            
1 GB 
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/d
atasets/industry235digitsicbusinessregisterandemploymentsurveybrestable2; UK 
https://www.ons.gov.uk/releases/uklabourmarketstatisticsmar2018  

UK EITI report for 2016 
 
| P a g e  26 
sector for the Scottish economy is no surprise, the relatively high share of activity in 
the East Midlands is noteworthy. 
Table 12. Regional distribution of extractives activity1 
 
Gross Value Added 
(Income Approach)1,2 
at current basic prices (£ billion) 
 
2016 shares of UK less Extra-Regio (Extra-Regio of UK) 
 
Mining and quarrying including oil and gas 
 
All Industries 
Region name 
2012 
2013 
2014 
2015 20163  
Gross 
Value 
Added 
Gross 
Trading 
Profits 
Compen-
sation of 
Employees 
 Gross 
Value 
Added 
Gross 
Trading 
Profits 
Compen-
sation of 
Employees 
North East 
0.31 
0.31 
0.32 
0.25 
0.25  
4.5% 
5.4% 
3.8%  
3.0% 
2.6% 
3.1% 
North West 
0.18 
0.17 
0.19 
0.23 
0.24  
4.4% 
6.0% 
2.8%  
9.6% 
9.7% 
9.8% 
Yorkshire and 
The Humber 
0.30 
0.30 
0.30 
0.29 
0.31  
5.7% 
5.5% 
5.5%  
6.7% 
5.8% 
7.1% 
East Midlands 
0.48 
0.48 
0.49 
0.42 
0.43  
7.9% 
8.3% 
7.8%  
5.9% 
5.6% 
6.1% 
West 
Midlands 
0.14 
0.10 
0.10 
0.11 
0.11  
2.1% 
2.1% 
1.6%  
7.4% 
7.0% 
7.8% 
East of 
England 
0.17 
0.18 
0.23 
0.22 
0.22  
4.0% 
5.1% 
2.8%  
8.7% 
8.8% 
8.5% 
London 
0.42 
0.33 
0.19 
0.19 
0.20  
3.7% 
3.9% 
2.2%  22.9% 
25.2% 
21.9% 
South East 
0.45 
0.45 
0.40 
0.31 
0.34  
6.1% 
6.8% 
5.5%  14.9% 
15.5% 
14.3% 
South West 
0.49 
0.47 
0.38 
0.23 
0.26  
4.7% 
4.4% 
4.8%  
7.5% 
6.7% 
7.6% 
England 
2.94 
2.78 
2.60 
2.24 
2.35  
43.1% 
47.6% 
36.7%  86.6% 
87.0% 
86.4% 
Wales 
0.28 
0.24 
0.22 
0.19 
0.23  
4.3% 
4.8% 
3.8%  
3.5% 
3.0% 
3.6% 
Scotland 
3.24 
2.58 
2.58 
2.61 
2.72  
50.0% 
44.8% 
56.9%  
7.8% 
7.9% 
7.9% 
Northern 
Ireland 
0.11 
0.12 
0.12 
0.13 
0.14  
2.6% 
2.8% 
2.5%  
2.2% 
2.2% 
2.2% 
Extra-Regio4 
21.84 21.70 
18.31 15.31 15.85  
74.4% 
84.2% 
57.3%  
1.0% 
3.2% 
0.6% 
United 
Kingdom 
28.40 27.42 
23.82 20.48 21.30    
  
  
   
  
  
 
 
 
 
 
 
  
 
 
  
 
 
Share of GVA 
 
 
 
 
 
 
100.0% 
65.7% 
33.1%  100.0% 
21.2% 
55.5% 
  
 
 
 
 
  
 
 
  
 
 
1 Estimates of workplace based GVA allocate incomes to the region in which the economic activity takes place.  
2 Components may not sum to totals as a result of rounding. 
3 Provisional.  
4 The GVA for Extra-Regio comprises compensation of employees, holding gains and gross trading profits which cannot be 
assigned to regions. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Source: ONS Regional gross value added (income approach), UK: 1997 to 2016 (20 December 2017). 
Almost all UK oil and gas production comes from fields located offshore. Maps 
showing the location of oil and gas fields in GB and on the UK Continental Shelf 
(UKCS) are published online by the Oil and Gas Authority (OGA).2 These maps also 
show which areas are under licence offshore and onshore in Great Britain. A map 
showing which areas are under licence in Northern Ireland is published by the 
Northern Ireland Department for the Economy (DfE)3 but there is as yet no 
production there. 
                                            
1https://www.ons.gov.uk/economy/grossvalueaddedgva/datasets/regionalgrossvalueaddedincomeapp
roach 
2 https://www.ogauthority.co.uk/data-centre/interactive-maps-and-tools/ 
3 https://www.economy-ni.gov.uk/publications/petroleum-licence-map 

UK EITI report for 2016 
 
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The majority of coal production comes from sites in Scotland, England and South 
Wales, as mapped by the Coal Authority.1 The mining and quarrying of non-
hydrocarbon minerals are widely distributed across the UK. There are no significant 
hard-rock aggregate deposits in the South and East of England, so these materials 
are transported for use in these regions from further afield in the Midlands and South 
West in particular. 
For further details of the geographical location of UK oil, gas and minerals 
production, see Sections 2.2 and 2.3. 
2.1.6. UK fossil fuel production and UK energy demand 
UK production of fossil fuels has been, and continues to be, significant in terms of 
meeting UK energy demand. This is particularly true of oil and gas but, nowadays, 
much less so for coal. While the share of total demand represented by fossil fuels 
has been declining, they still account for more than four fifths of total primary energy 
demand and are forecast to account for more than two thirds of total primary energy 
demand even in 2035.2 With higher UK production and historically low UK demand, 
in 2016 UK fossil fuel production was equivalent to almost half of total UK energy 
demand resulting in significant net imports of coal, oil and gas. This is illustrated in 
Figures 3, 4, 5 and 6 below. 
Figure 3. UK fossil fuel production and primary energy demand3 
Source: Energy Trends Table 1.3, March 2018. 
                                            
1 Coal Authority, Interactive Map, http://mapapps2.bgs.ac.uk/coalauthority/home.html 
2 https://www.gov.uk/government/collections/energy-and-emissions-projections 
3 https://www.gov.uk/government/statistics/total-energy-section-1-energy-trends 

UK EITI report for 2016 
 
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Figure 4. Destination of UK oil production and sources of UK oil supply, 20161 
 
Source: Digest of UK Energy Statistics (DUKES), July 2017 [principally Table G4]. 
Figure 5. UK monthly gas supply2 
 
Source: Energy Trends Tables 4.2 and 4.3, March 2018. 
                                            
1 https://www.gov.uk/government/collections/digest-of-uk-energy-statistics-dukes 
2 https://www.gov.uk/government/statistics/gas-section-4-energy-trends 

UK EITI report for 2016 
 
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Figure 6. Sources of UK gas supply on a rolling 12 month basis1 
 
Source: Energy Trends Tables 4.2 and 4.3, March 2018. 
                                            
1 https://www.gov.uk/government/statistics/gas-section-4-energy-trends 

UK EITI report for 2016 
 
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2.2. Oil and Gas 
2.2.1. Background and recent developments 
The UK’s oil and gas sector is dominated by production from offshore areas, which 
account for virtually all of UK output.1 Production of natural gas began in 1967 with 
the West Sole field in the Southern North Sea. Offshore oil production began with the 
Argyll field in the Central North Sea (CNS) in 1975. At the start of the industry in the 
1960s and 1970s production was dominated by a small number of very large fields, 
such as Inde, Leman, Forties, Brent, Ninian and Piper, and the development of key 
offshore infrastructure pipelines. UKCS production now comes from a large number 
(over 300) of predominantly small fields and others that are much more technically 
complex to produce from, both of which tend to increase unit development and 
production costs. By 2016, more than 43 billion barrels of oil equivalent (boe) have 
been recovered from the UK Continental Shelf (UKCS). The OGA estimates that a 
further 10 to 20 billion boe could still be recovered from the basin.2 
2.2.2. Key Economic parameters 
Oil and Gas prices 
Boom and bust cycles are the norm in the energy markets. Throughout the years, 
the nominal price of oil has fluctuated significantly, reaching as low as $3 per barrel 
in the 1970s and as high as $143 per barrel in July 2008. The oil price is affected by 
many factors, all of which are global in nature, and reach from supply and demand 
fundamentals to the strength of the US Dollar (all oil is traded in US Dollar) and to 
geopolitical stability. Global demand for oil and gas has been steadily rising since the 
1970s and has nearly doubled since then.3 Strong economic growth particularly in 
fast-growing developing economies like China and India is a major contributor to 
increasing levels of demand. 
The United States was, until 2010, the world’s largest net importer of crude oil, which 
was a significant contributor to the steady increase in prices until then. Since 2011, 
the growth of US tight oil (often referred to as “US shale”) has reduced the reliance 
of the United States on imports by over one third. Together with a slow-down in 
China’s rapid economic growth and more efficient energy use overall, this caused 
prices to fall rapidly towards the end of 2015 and throughout 2016. During 2016, 
                                            
1 Wytch Farm in Dorset, England, is the only substantial onshore field and is partly covered by a 
“seaward” licence; the drilling sites are onshore, but some of the wells extend under Poole Harbour. 
Wytch Farm is here treated as offshore. 
2 OGA, Reserves and Resources http://www.ogauthority.co.uk/data-centre/data-downloads-and-
publications/reserves-and-resources/ 
3 The International Energy Agency publishes annual booklets of its most useful statistics, including the 
Key World Energy Statistics 2017. These show a steady increase of oil and gas consumption (and 
thus demand) since the 1970s. 
http://www.iea.org/publications/freepublications/publication/KeyWorld2017.pdf, page 39f. 

UK EITI report for 2016 
 
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dated Brent oil price was at its lowest nominal level since 2004 at an average $44 
per barrel, with a trough of $31 per barrel in January 2016.1 
Figure 7. Brent Spot Price (nominal)2 
 
Sources: World Bank and Bank of England. 
Gas markets are still mostly regional in nature due to infrastructure, transportation 
and currency exchange limitations. Historically, gas prices in Europe (including the 
UK) were determined through long-term contracts, with prices adapted regularly 
according to contractual review clauses. Prices were often linked to oil and oil 
products, and thus were trailing oil price developments by about 4 to 6 months. 
Deregulation in the UK gas market since the 1990s resulted in the creation of the 
NBP (National Balancing Point), a virtual trading location of UK natural gas. Various 
European trading hubs have followed since, together with the interconnector in 1998, 
and the NBP is currently the second most liquid European gas trading point.3 Gas 
prices available from these hubs show the regional effect on pricing (due to residual 
lack of interconnectedness), as well as a seasonality trend reflecting rising gas 
demand in winter. 
In recent years, LNG (Liquefied Natural Gas) has become an increasingly important 
driver of European Gas market dynamics. The UK is currently a net importer of 
                                            
1 A more detailed analysis of the supply imbalance and cyclical adjustments currently being 
experienced by the oil and gas industry, see BP’s Statistical review of World Energy 2017: 
https://www.bp.com/content/dam/bp/en/corporate/pdf/energy-economics/statistical-review-2017/bp-
statistical-review-of-world-energy-2017-full-report.pdf. 
2 Monthly average dollar Brent oil price from World Bank Commodity Price Data (The Pink Sheet), 
http://www.worldbank.org/en/research/commodity-markets; monthly average £/$ exchange rate 
(series XUMAUSS) from http://www.bankofengland.co.uk/. 
3 TTF, the Dutch Transfer Facility, is the most liquid: https://www.theice.com/endex. See also the 
trading of NBP contracts on ICE: https://www.theice.com/products/910/UK-Natural-Gas-Futures 

UK EITI report for 2016 
 
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Natural Gas, and piped gas from Russia is the main competition to LNG in Europe. 
As such, Europe is seen as the market of last resort to absorb surplus LNG volumes 
from the current global gas supply surplus.1 Gas prices across the globe reached 
new lows in early 2016 within weeks of the trough in oil prices (see above 
paragraphs), with NBP month-ahead prices reaching a low of 28 pence per therm in 
April 2016. The acute oversupply of gas in 2015 due to weaker import demand 
growth in Asia, additional LNG capacity added globally and 2015 having been the 
warmest year on record resulted in a significantly weakened price, which carried into 
2016. An increase in the replacement of power generation by coal to power 
generation by gas, the temporary cessation of the Rough storage facility in the UK, 
continues uncertainly over LNG supply to the UK and the colder winter in 2016/17 
has somewhat stabilised NBP prices at an average of 34.6 pence per therm for 2016 
(down from the average month-ahead NBP price of 42.6 pence per therm for 2015).2 
Figure 8. Gas Spot Price (nominal) 
 
Source: OGA from various sources. 
Production 
Production on the UKCS is currently split roughly 60:40 between oil production and 
natural gas production (Figure 9). 
                                            
1https://www.bp.com/en/global/corporate/energy-economics/energy-outlook/demand-by-fuel/natural-
gas.html  
2 See also Oil & Gas UK’s 2016 and 2017 Economic Reports; http://oilandgasuk.co.uk/wp-
content/uploads/2017/09/Economic-Report-2017-Oil-Gas-UK.pdf 

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Figure 9. UK oil and net gas production1 
 
Source: OGA. 
Combined oil and gas production volumes from the UKCS peaked in 1999 at 4.6 
million boe/day and have since declined to 1.6 million boe/day in 2016 – a 
consequence of natural reservoir decline in existing fields combined with 
fewer/smaller developments. Between 2014 and 2016, however, this trend was 
reversed and production on the UKCS has increased by 16% during that timeframe. 
The increase was due to improved performance of existing assets, as well as the 
addition of significant new capacity – nine new fields commenced production in 2016 
(Laggan, Tormore, Conwy, Solan, Aviat, Cygnus, Alder, Crathes and Scolty). 
Table 13. Volume and value of production of coal, oil and gas, 2012–2016 
 
Volume of indigenous production (mtoe)  Value of indigenous production (£ million) 
Year 
Coal 
Oil Natural Gas Oil & Gas  
Coal 
Oil 
Natural Gas 
Oil & Gas 
2012 10.583 48.756 
37.444 
86.200  
990 
23,685 
7,840 
31,525 
2013 
7.973 44.468 
35.331 
79.799  
500 
21,330 
7,755 
29,085 
2014 
7.289 43.705 
35.762 
79.467  
390 
18,135 
6,265 
24,400 
2015 
5.384 49.544 
38.847 
88.391  
255 
12,985 
6,440 
19,425 
2016 
2.633 51.952 
39.790 
91.741  
135 
12,790 
4,850 
17,640 
  
 
 
 
  
 
 
 
Source: Digest of UK Energy Statistics 2017. 
Figure 10 illustrates the long-term decline and more recent growth in UK crude oil 
production since 2000. 
                                            
1 Source: OGA. Net natural gas production equals gross production less producers’ own use i.e. the 
gas used in the course of production of oil and gas and therefore not available for sale to end users. 
The OGA publishes data relating to production of UK oil and gas, including production data for 
individual fields, production and expenditure projections and tables and charts on UKCS income and 
expenditure: https://www.ogauthority.co.uk/data-centre/data-downloads-and-publications/ 

UK EITI report for 2016 
 
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Figure 10. UK crude oil production by start-up year of field1 
 
Source: OGA Petroleum Production Reporting System. 
The UK is still a significant oil and gas producer, being responsible for 1.1% of global 
output of oil and gas in 2016.2 
Cost Environment 
Total upstream expenditure peaked in 2014 at £27.8 billion and fell to £17.5 billion in 
2016. The impact of the fall in oil and gas prices has put industry under immense 
pressure to reduce expenditure, both through readjusting budgets and rationalising 
expenditure. There has been a marked lack of new commitments entered into since 
2015, which is perhaps the biggest threat to the long-term future of the basin. It also 
illustrates the extreme difficulty to investors to raise the further capital to invest in 
new projects in marginal return environment. The year 2016 saw development 
consent for only 2 new fields. 
In Quarter 2 2016, the average net rate of return for UKCS companies fell to just 
0.6%, improving slightly to 3.8% by Quarter 4.3 Profitability of UKCS companies, as 
                                            
1 Source: OGA, https://data-ogauthority.opendata.arcgis.com/pages/production  
2 BP, Statistical Review of World Energy 2017, 
https://www.bp.com/content/dam/bp/en/corporate/pdf/energy-economics/statistical-review-2017/bp-
statistical-review-of-world-energy-2017-full-report.pdf. 
3 ONS, Profitability of UK companies, January 2018, 
https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/datasets/profitabilityofukcompan
ies; see also Oil & Gas UK’s Economic Report 2017, https://oilandgasuk.co.uk/wp-
content/uploads/2017/09/Economic-Report-2017-Oil-Gas-UK.pdf 

UK EITI report for 2016 
 
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measured by the ONS, has increased slightly but remains very low by historical 
standards. UKCS companies have historically experienced volatile profitability, due 
to oil price movements, cost environment and scale of discoveries made (i.e. 
profitability is falling in line with the increasing maturity of the basin). 
Figure 11. Upstream oil and gas expenditure, 2000–20161 
 
Source: OGA. 
2.2.3. Reserves and forecasts 
Full details of the assumptions underpinning forthcoming years in the Budget cycle 
relating to projected production, commodity prices and revenue forecasts are 
provided by the independent OBR.2 
Exploration activity in 2016 continued the all-time low trend since the start of offshore 
exploration in the mid-1960s. Only 14 offshore exploration wells (including 
sidetracks) were drilled in the year, compared to 13 in 2015. Discovered volumes are 
thought to have been around (150 million boe, an improvement on recent years, but 
still below the 10-year average).3 Cumulative reserves produced to date are catching 
up with cumulative resources discovered to date (Figure 12) and the number of fields 
                                            
1 https://www.ogauthority.co.uk/data-centre/data-downloads-and-publications/ukcs-income-and-
expenditure/ 
2 OBR, http://obr.uk/ 
3 Oil & Gas UK, Activity Survey 2016, http://oilandgasuk.co.uk/wp-content/uploads/2016/01/Ross-
Dornan-The-Activity-Survey-2016.pdf 

UK EITI report for 2016 
 
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discovered but not yet developed is dwindling – an important issue for the long-term 
future of the UKCS. 
Figure 12. Recoverable UK oil and gas reserves discovered and produced1 
 
Source: Wood Mackenzie. 
The path of future production is uncertain and, consequently, forecasts of future 
production rates vary. In early 2017, Oil & Gas UK predicted that production would 
continue to increase in the near term, with the start-up of some very large projects 
more than offsetting anticipated decline from existing fields. In early 2018, the OGA’s 
central projection was for a small increase in production in 2018 followed by 
declining production (Figure 13). 
                                            
1 Data from Wood Mackenzie, Upstream Data Tool 
https://www.woodmac.com/research/products/upstream/upstream-data-tool/ 

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Figure 13. Oil & Gas UK and OGA forecasts of future UK oil and gas production1 
Sources: Oil & Gas UK and OGA. 
2.2.4. Trade 
Domestic production of oil and gas continues to supply around 50% of UK 
hydrocarbon consumption. For data on the volume and value of UK exports (and 
imports) of oil and natural gas, see Section 2.1. Net exports (imports) since 1998 are 
illustrated in Figure 14. 
                                            
1 Source: Oil & Gas UK, Business Outlook 2018, March 2018 
http://oilandgasuk.co.uk/businessoutlook-2, OGA, Projections of UK Oil and Gas Production and 
Expenditure, February 2018, https://www.ogauthority.co.uk/data-centre/data-downloads-and-
publications/production-projections/ 

UK EITI report for 2016 
 
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Figure 14. Volume and value of net UK oil and gas exports (imports)1 
Source: Digest of UK Energy Statistics 2017. 
Oil and gas (whether domestically produced or imported) currently provide well over 
70% of the UK’s total primary energy needs and, despite policy objectives and 
measures supporting the use of alternative energy sources, the Department for 
Business, Energy and Industrial Strategy (BEIS)2 expects this percentage to stay 
well over 70% at least until 2035 under existing policies. 
2.2.5. Employment 
In addition to direct employment in oil and gas companies there is a significant 
number of jobs in companies providing support activities. Official estimates for both 
are tabulated below; these are as reported in Table 11 in sub-section 2.1.4. 
Table 14. Direct employment (Great Britain not United Kingdom) (in thousands)3 
Thousands 
2012 2013 2014 2015 2016 
Oil and Gas Extraction 
15.6 
15.5 
16.6 
15.7 
15.1 
Support activities for petroleum and natural gas extraction 
22.3 
21.2 
25.1 
22.4 
20.4 
Oil and Gas Extraction and Support Services 
37.9 
36.7 
41.7 
38.1 
35.5 
  
 
 
 
 
Source: Business Register and Employment Survey (Table 2a). 
 
                                            
1 Source: https://www.gov.uk/government/collections/digest-of-uk-energy-statistics-dukes 
2 Department set up in July 2016 combining parts of the Department for Business, Innovation and 
Skills (BIS) with the Department of Energy and Climate Change (DECC). 
3https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/d
atasets/industry235digitsicbusinessregisterandemploymentsurveybrestable2 

UK EITI report for 2016 
 
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Additional information on employment in the UK oil and gas industry, including the 
UK supply chain, is published by Oil & Gas UK.1 This information includes estimates 
of the indirect and induced jobs that depend on the UK’s upstream oil and gas 
sector. Note that the direct employment estimates reported differ from the ONS 
estimates, especially for 2016. 
Table 15. Total employment supported by the UK Upstream Oil and Gas Industry2 
  
 
2013 
2014 
2015 
2016 
Direct 
(A) 
36,600 
41,300 
37,300 
29,500 
Indirect 
(B) 
198,100 206,100 163,100 150,600 
Induced 
 
206,200 216,500 173,400 135,300 
Total employment 
 
440,900 463,900 373,800 315,400 
 
 
 
 
 
 
Direct plus Indirect 
(C) = (A) + (B) 234,700 247,400 200,400 180,100 
Indirect % of Direct plus Indirect 
(B) / (C) 
84% 
83% 
81% 
84% 
 
 
 
 
 
 
where: 
 
 
 
 
 
Direct – those employed by companies extracting oil and gas 
Indirect – those who provide goods and services for an oil and gas company 
Induced – local economy jobs that benefit from the sector e.g. hospitality 
 
 
 
 
 
 
Source: Figure 1 in Workforce Report 2017 (Oil & Gas UK, October 2017). 
2.2.6. Legal framework and licensing3 
The Petroleum Act 19984 vests rights to oil and gas (petroleum) resources in Great 
Britain and on the UK Continental Shelf (UKCS) in the Crown. The Act gives the 
OGA (formerly the Secretary of State) powers to grant licences that confer exclusive 
rights to “search and bore for and get” petroleum. Each of these licences confers 
such rights over a limited area and for a limited period. There are separate licensing 
regimes for offshore (seaward) and onshore (landward) areas, with distinct licences 
in each. 
Licences are generally awarded in periodic “rounds” subject to a requirement that the 
holder will make annual payments (known as “licence rental fees”). These payments 
are calculated on the basis of the area under licence and incorporate an escalating 
scale of pre-determined rates per square kilometre. This is to encourage licensee 
companies to relinquish acreage not undergoing productive activity, thus making it 
available for relicensing to other potential interested applicants. The vast majority of 
licence rental fees come from offshore licensing. Receipts of petroleum licences 
                                            
1 https://oilandgasuk.co.uk/product/workforce-report-2017/ 
2 https://oilandgasuk.co.uk/product/workforce-report-2017/ 
3 This sub-section draws on the material on Licensing and consents on the OGA’s website at 
https://www.ogauthority.co.uk/licensing-consents/overview/ to which reference may be made for 
further details  
4 Petroleum Act 1998, www.legislation.gov.uk/ukpga/1998/17/contents 

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under the Petroleum Act 1998 are collected by the OGA (formerly DECC) for 
payment to the Consolidated Fund. 
The Petroleum (Production) Act (Northern Ireland) 19641 vests the property in oil and 
gas in Northern Ireland, with certain exceptions, in the Department for the Economy 
(DfE). 
Northern Ireland’s offshore waters are subject to the same licensing regime as the 
rest of the continental shelf. 
The OGA publishes oil and gas licences and licence reports.2 The OGA also 
publishes offshore and onshore maps which are available for nil cost; these 
interactive maps allow users to find the co-ordinates of each licence and download at 
nil cost, individual licences.3 The Northern Ireland DfE issues separate onshore 
licences independently of the OGA and publishes current licences and a map 
showing licence areas.4 
Award and transfer of licences in Great Britain and on the UKCS 
The OGA works to maximise economic recovery of the nation’s petroleum resources. 
The government has essential pre-requisites for licence applicants, such as requiring 
the would-be licensee to have a fixed place of business within the UK. 
Licences are awarded during regular competitive onshore and offshore licensing 
rounds once the OGA has been satisfied that the licensee has met the necessary 
technical and financial requirements.5 This method of licensing aims to optimise 
recovery of the UK’s remaining petroleum resources. The 29th Offshore Licensing 
Round and the 2016 Offshore Supplementary Round were started in 2016 but no 
offers were made until 2017.6 Licences were offered in December 2015 following the 
14th Onshore Licensing Round.7 Out-of-round licence applications are possible but 
only in exceptional circumstances and there were no non-trivial deviations from the 
applicable legal and regulatory framework governing licence transfers during 2016. 
                                            
1 Petroleum (Production) Act (Northern Ireland) 1964, 
http://www.legislation.gov.uk/apni/1964/28/contents 
2 OGA, https://www.ogauthority.co.uk/data-centre/data-downloads-and-publications/licence-data/ 
3 https://www.ogauthority.co.uk/data-centre/interactive-maps-and-tools/ 
4 DfE, Petroleum licensing, https://www.economy-ni.gov.uk/articles/petroleum-licensing 
5 OGA documentation of award rounds is available at https://www.ogauthority.co.uk/licensing-
consents/licensing-rounds/ 
6 https://www.ogauthority.co.uk/licensing-consents/licensing-rounds/offshore-licensing-rounds/#tabs. 
7 https://www.ogauthority.co.uk/licensing-consents/licensing-rounds/onshore-licensing-rounds/#tabs. 

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Licensing rounds are announced in the Official Journal of the European Union and 
assessed against a publicly announced set of criteria.1 
Each licence takes the form of a deed, which binds the licensee (either a single 
company or several working together and bound under joint and several liability) to 
obey the licence conditions regardless of whether or not they are using the licence at 
any given moment. The OGA (and DECC previously) regulates the transfer of 
licence interests in order to enforce its policy objectives. A company that is party to a 
licence may wish to sell its interest or a part of it, to another company. It requires the 
OGA’s permission to do so.2 
Licence applications and interests attract fees and charges payable by the applicant 
or licensee. Each licence carries an annual charge, commonly called a rental. 
Rentals serve the double purpose of incentivising licensees to work their whole 
licensed areas and to surrender acreage they do not intend to exploit. Rentals are 
due every year on the licence anniversary and are charged at a variable rate on 
each square kilometre that the licence covers at that date. The rates are set out in 
the licence document at award. Payments are made to the OGA only by licence 
administrators (typically operators, who recoup the payments from the licensees in 
proportion to their interests in each licence) so the reconciled amounts reported in 
Table 4.1 do not reflect the extent in which payments to the OGA are spread 
between licensees. 
Onshore licensing was devolved to the Scottish Government on 9 February 2018 
and will be devolved to the Welsh Government on 1 October 2018. The Scottish 
Government has announced a moratorium on fracking in Scotland. However, the 
position is subject to the outcome of a Strategic Environmental Assessment, which is 
expected to conclude in Summer 2018. A planning review including extraction of 
unconventional oil and gas (including shale gas and coalbed methane) was 
announced by the Welsh Government in October 2017. The result of this planning 
review will need to be announced before further planning applications are submitted. 
Licence conditions and types of licences 
Each licence contains detailed terms and conditions, but not all regulation is 
contained in the licence. The Petroleum Act 1998 requires these conditions — called 
model clauses — to be published first in secondary legislation except in particular 
                                            
1 See for example http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52014XG0620(01)&from=EN for the announcement of the 14th 
landward licensing round including the assessment criteria. 
2 See https://www.ogauthority.co.uk/licensing-consents/licensing-system/licence-assignments/ for 
further details. Details of current licences are available at https://www.ogauthority.co.uk/data-
centre/data-downloads-and-publications/licence-data/. 

UK EITI report for 2016 
 
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cases.1 In recent years, the model clauses have also been set out in full in the 
licence document. 
Production licences are valid for a sequence of periods, or terms. These terms mirror 
the typical life cycle of a field: exploration, appraisal and production, and provide that 
each licence will expire automatically at the end of each term, unless the licensee 
has sufficiently progressed to warrant a move into the next term. The duration of 
each term depends on the type of the licence. 
The OGA publishes additional information about the different types of licences, their 
normal duration and different phases of the licensing lifecycle.2 
While landward licences confer the right to search for, bore and extract petroleum on 
areas under licence, they do not exempt the licensee from other legal or regulatory 
requirements, including a need to obtain access rights from landowners or planning 
permission from relevant local authorities, or to conform to health and safety 
regulations. 
In Northern Ireland, there is only one type of petroleum licence, this has broadly 
similar terms and conditions to onshore Petroleum Exploration and Development 
Licences (PEDLs) in Great Britain but also some differences.3 
2.2.7. The oil and gas tax regime 
Introduction 
As the UK’s oil and gas industry has developed over the last 40 years, successive 
governments have developed a tax regime designed to ensure that the nation 
receives a fair share of the profits from the exploitation of its oil and gas reserves. At 
the same time, the regime aims to support maximising the economic recovery of the 
UK’s remaining hydrocarbon resources. 
In 2016, the fiscal regime which applied to oil and gas extractive activities comprised 
three separate taxes: Petroleum Revenue Tax (PRT), Ring Fence Corporation Tax 
(RFCT) and the Supplementary Charge (SC). 
The tax regimes 
Petroleum Revenue Tax (PRT) 
PRT is a tax on oil and gas production from the UK and UKCS. It is a field-based tax, 
which means that the profits from individual oil fields are calculated and subjected to 
tax separately. Companies do not aggregate their profits from different fields and 
cannot normally set off losses from one field against profits from another. PRT was 
                                            
1 Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014, 
http://www.legislation.gov.uk/uksi/2014/xx-xxxx-xxxx/contents/made 
2 OGA, https://www.ogauthority.co.uk/licensing-consents/overview/. 
3 https://www.economy-ni.gov.uk/articles/petroleum-licensing. 

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introduced by the Oil Taxation Act 1975 and was dis-applied in Finance Act 1993 for 
all fields given development consent on or after 16 March 1993. This means that 
fields that were given development consent after this date are not subject to PRT. 
The Chancellor announced at Budget 2016, that from 1 January 2016 the PRT rate 
would be permanently reduced to zero. However, it is important to note that PRT has 
not been abolished. Companies will still have to record and declare their profits and 
may be able to claim tax refunds for previously paid PRT where they make net 
losses after this date. 
Some companies will still have made payments of PRT in 2016, despite it having 
been zero-rated. This is because the zero rating was not announced until the Budget 
in March, and so companies continued to make payments before then. Companies 
also still had to make payments in relation to prior periods when tax was still 
payable. 
Advance PRT Payments 
Advance Petroleum Revenue Tax (APRT) was a temporary tax payable for periods 
from 1 January 1983 to 31 December 1986. The change was in effect a means of 
accelerating PRT payments.  
Although APRT is no longer chargeable, repayments may arise due to the carry back 
of losses to periods in which APRT paid was set against a PRT liability. For practical 
purposes APRT repayments are included within the PRT figures in this EITI report. 
Ring Fence Corporation Tax (RFCT) 
RFCT is a tax charged on the profits a company earns from carrying out oil and gas 
extraction activities in the UK and UKCS. This can include exploration, development 
and production activities. The profits chargeable to RFCT are calculated in the same 
way as for mainstream CT, but with some different rules relating to certain 
allowances, interest and transfer pricing. RFCT is charged at the company level, 
unlike PRT which was charged at the field level. This means that where a company 
has several different oil fields, it aggregates the profits from all those fields, and 
where any of the fields makes a loss, that loss can be set against profits from 
another field. The total profit across all fields in which a company operates is then 
charged to RFCT. 
The ring fence separates the upstream UK oil and gas related activities of a 
company from any other activities of the company. It was introduced in the Oil 
Taxation Act 1975, and it means that if a company also carries on other activities 
which are not related to oil and gas extraction (this could include downstream oil and 
gas activity such as oil refining, or other completely separate activities), it will pay 
mainstream corporation tax (CT) on the profits of those other activities. Profits in the 
ring fence are taxed at 30%. This is higher than the main rate of CT for other 
activities which was 20% throughout 2016. If a company makes a loss on non-ring 
fence activities, it cannot set that loss against its ring fence profits (ring fence losses 
can be set against non-ring fence profits). 

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If a company makes a small profit (less than £300,000) on its ring fence activities, it 
pays tax at the small profits rate of 19% on those profits. If its profits are between 
£300,000 and £1,500,000 it can claim Marginal Relief, to remove the cliff-edge 
between 19% and 30% as soon as its profits are above £300,000. 
Supplementary Charge (SC) 
SC is an additional tax on a company’s adjusted ring fence profits. It was introduced 
in 2002. Like RFCT it is charged at the company level. The starting point for 
calculating the SC is the company’s profits subject to RFCT. These profits are then 
adjusted to remove any finance costs, which are not allowed as a deduction for SC 
purposes. The company may, however, be able to reduce its profits subject to the 
SC by virtue of certain allowances: the Investment Allowance and Cluster Area 
Allowance, and the Onshore Allowance, which are outlined below. The company’s 
adjusted ring fence profits are then charged to SC. In 2016 the rate of SC was 10%. 
Summary of rates for 2016 
• 
PRT – 0% 
• 
RFCT – 30% 
• 
SC – 10% 
Interaction 
PRT was an allowable deduction in calculating profits subject to RFCT and SC. 
Equally, any refund of PRT is a taxable receipt for RFCT and SC purposes. RFCT 
and SC are charged on the same profit base, so neither is allowable as a deduction 
in calculating the profits chargeable to the other. 
This means that the overall marginal tax rate in 2016 was 40%. An example of this is 
shown below: 
Table 16. Illustrative tax calculation 
  
PRT or non-PRT liable field 
Profit 
£1,000 
PRT at 0% 
£0 
Profits after PRT 
£1,000 
RFCT at 30% 
£300 
SC at 10% 
£100 
Total tax (PRT+RFCT+SC) 
(£400) 
Profit after tax 
£600 
Tax as a % of pre-tax profit 
40% 
There have been numerous changes to the tax rates for PRT, RFCT and SC. PRT 
peaked at 75%, was reduced to 50% by Finance Act 1993, and as noted above, was 
permanently zero-rated at Budget 2016. Mainstream CT rates have been reduced 
substantially since 2008, but the RFCT rate has remained at 30%, creating a 
differential between the two. SC has varied between 10% and 32% since its 
introduction. 

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Previously, there was also a royalty levied at 12.5% of the value of petroleum which 
was generally measured as “well head value”. This was abolished for new fields in 
phases starting in 1983 with abolition in its entirety with effect from the end of 2002 
as it distorted investment incentives. In addition, a Supplementary Petroleum Duty 
(SPD) was in place in 1981 and 1982.  
Allowances 
There are various allowances that apply to reduce the amount of PRT, RFCT or SC 
that a company has to pay. 
PRT allowances 
A number of allowances used to be available under the PRT regime to prevent an 
excessive PRT burden falling on smaller, more economically marginal fields. Oil 
Allowance was the only one that was still relevant to years immediately prior to 2016. 
Oil Allowance ensures that many small fields are effectively free from PRT. The 
available amounts are converted each chargeable period into a “cash equivalent” 
which then reduces the liability to PRT. 
RFCT allowances 
Capital allowances 
Capital allowances are a feature of business taxation in the UK and apply to the 
mainstream CT regime (as well as to income tax). For CT purposes, the general rule 
is that capital expenditure is not allowed as a deduction for tax purposes. This 
means that profits chargeable to CT cannot be reduced by depreciation or similar 
expenses. The capital allowance regime exists to provide some relief for capital 
expenditure incurred. 
There are specific rules and rates of allowances available for companies carrying on 
a ring fence trade. These allowances mean that in practice, virtually all capital 
expenditure incurred by oil and gas companies for the purposes of their ring fence 
trades will qualify. 
There are three types of allowance which are commonly relevant for companies 
carrying on a ring fence trade. Research and Development Allowance (RDA), 
Mineral Extraction Allowance (MEA) and Plant and Machinery Allowances (PMA). 
RDA and MEA are primarily relevant to companies incurring capital expenditure on 
exploring for, appraising and gaining access to oil and gas during the pre-production 
phase. PMAs are available on capital expenditure on items of plant or machinery 
used in the ring fence trade. Mostly these are 100% First Year Allowances (FYAs), 
which allow the full amount of the expenditure to be written off for tax purposes in the 
accounting period in which the expenditure is incurred. 
Ring Fence Expenditure Supplement (RFES) 
RFES is designed to assist companies which do not yet have sufficient RFCT profits 
against which to set their exploration, appraisal and development costs. The RFES 

UK EITI report for 2016 
 
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currently increases the value of unused expenditure carried forward from one 
accounting period to the next by a compound 10% a year for a maximum of 10 years 
(6 years prior to 2014). The company can elect which periods it wants to claim RFES 
for. They do not have to be consecutive years. 
SC allowances 
Cluster Area Allowance 
Legislation in the Finance Act 2015 introduced a new Cluster Area Allowance, which 
aims to support large development projects in areas of high pressure and high 
temperature, encouraging exploration and appraisal in the surrounding area (or 
“cluster”). The allowance is generated by incurring capital expenditure, and certain 
types of operating and leasing expenditure within the cluster area. The value of the 
allowance is 62.5% of the capital expenditure incurred. Any allowance generated is 
carried forward year on year until it is activated. Allowance is activated by production 
income from the cluster area. Once the allowance has been activated it is set against 
profits subject to the SC, so that any such profits are only subject to RFCT at 30%. 
Cluster areas are determined as such by the OGA, and the only area determined by 
the end of 2015 was the Culzean Cluster Area in the CNS. 
Onshore Allowance 
The Onshore Allowance was introduced in Finance Act 2014 to provide support for 
the early development of onshore oil and gas projects which were economic but not 
commercially viable at the prevailing tax rates. The onshore allowance covers both 
conventional and unconventional hydrocarbons and replaces all existing field 
allowances for onshore projects. The allowance works in a similar way to Cluster 
Area Allowance: it is generated by capital expenditure, in an amount equal to 75% of 
that capital expenditure. Once the allowance is activated by production income in 
relation to an onshore site, the allowance is used to reduce the adjusted ring fence 
profits which are subject to SC. 
Investment Allowance 
The existing system of offshore field allowances was replaced by a single Investment 
Allowance in Finance Act 2015. Similarly to the Cluster Area and Onshore 
Allowances, the Investment Allowance is generated by capital expenditure, and 
certain types of operating and leasing expenditure incurred in relation to a qualifying 
oil field. The amount of allowance generated is equal to 62.5% of qualifying capital 
expenditure. Investment Allowance is activated by production income from the field, 
unlike Cluster Area Allowances, which can be activated by income from any field in a 
designated cluster. Once activated, it is used to reduce the adjusted ring fence 
profits chargeable to the SC. 
Losses 
Following a dramatic drop in the oil price during the second half of 2014 and 2015, 
the oil price remained relatively low by modern standards throughout 2016. As a 
result a number of companies were in a loss-making position, particularly because 

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the UKCS is a relatively high cost basin in which to operate. It is also a mature basin, 
with production having started in the late 1960s, so increasing numbers of fields are 
now in, or approaching, the decommissioning stage. Decommissioning costs can be 
substantial, which can also push companies into making a loss. 
When a business makes a loss, it may be able to get relief for that loss through the 
tax system. Loss relief is not unique to the oil and gas regime: it is a feature of 
income tax, mainstream CT and other regimes too. Broadly, loss relief works by 
allowing a loss made in one period to be set off, in certain circumstances, against 
profits in the same or other periods. 
PRT 
PRT is a field-based tax, so loss relief is normally available only against profits from 
the same field. A loss can be carried back and set against profits of the field in 
previous periods, most recent period first, or carried forward to set against future 
profits, earliest period first. The loss is set against the profit before Oil Allowance. 
Only once, following cessation of production, all carry back and carry forward options 
are exhausted for that participator and there are no further profits against which the 
loss can be set, can the loss then be relieved against profits of earlier participators in 
the field. If there are still any unrelieved losses, they can be relieved against profits 
from another field. 
Where a field has made an assessable profit, and paid tax in one period, and then 
has subsequently made a loss and the participator has chosen to carry the loss 
back, it could generate a repayment of tax. 
RFCT 
Where a company makes a loss for RFCT purposes, it can also choose how to treat 
that loss. The default position is that the loss is carried forward to set against future 
profits of the ring fence trade. However, the loss can also be set off against other 
(non-ring fence) profits arising in the year, or it can be carried back to set against the 
profits earned in previous years. Alternatively, where a company is part of a 
corporate group, it can surrender the loss to another company making a profit in the 
same period. 
Under the normal rules, losses can be carried back only against profits arising in the 
previous year. However, these time limits are extended where the trade has ceased, 
in which case the loss may be carried back up to three years. For ring fence trades, 
this time limit may be extended further where the loss is incurred as a result of 
decommissioning expenditure. In such situations, the loss may be carried back to 
any period ending on or after 17 April 2002, regardless of whether trade has ceased. 
SC 
SC is calculated on the same basis as RFCT, but with adjustment for finance costs. 
However, there is no loss relief for SC per se. Rather, if a company makes a RFCT 
loss, and elects to carry it forward or backward, it will reduce the RFCT profits, and 

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therefore the profit subject to SC of the subsequent or previous period will also be 
reduced, potentially to nil. 
Companies can generate a refund only where tax has already been paid. If a 
company has not paid tax in a previous year because it has not previously made a 
profit, it will not be able to carry the loss back, and will have to relieve it in one of the 
other ways outlined above. 
Variations in tax payments and repayments 
The amount of tax paid by a company can vary year on year for a number of 
reasons. Perhaps most obviously, changes in tax rates will affect the amount of tax 
paid. In recent years, the rates of PRT and SC have both dropped, reducing the 
amount payable under these taxes. The level of profits (or losses) made by a 
company will also vary year on year. Factors such as capital expenditure incurred 
both on decommissioning and on exploration and investment can reduce profits, and 
variations in the oil price will have a substantial impact on trading receipts. Equally, 
as explained above, while a company may make a profit in a year, if it has a loss to 
set against that profit, the amount of tax payable may fall, or indeed lead to a 
repayment of tax. 
Companies are charged to PRT for chargeable periods of 6 months, running from 1 
January to 30 June, and 1 July to 31 December. Companies’ profits are charged to 
RFCT and SC for accounting periods (APs). APs normally last for one year, although 
they can sometimes be shorter. Different companies have different APs, although 
commonly calendar or financial years are used. 
PRT payments 
PRT instalments were due based on the previous chargeable period. From 2016, as 
the PRT rate is reduced to nil, PRT payments were only made to true up previous 
year’s liabilities or instalments made prior to the announcement of PRT being zero-
rated at the 2016 Budget. 
RFCT/ SC payments 
The rules for payment of RFCT and SC differ from the payment rules for mainstream 
CT. Companies paying RFCT and SC, which would otherwise make payments under 
the mainstream CT quarterly instalment payments (QIPs) regime, instead pay their 
RFCT/SC in three payments: 6 months and 13 days from the start of the AP, 3 
months after the first payment, and 14 days from the end of the AP. This means the 
payments are due earlier than under mainstream CT rules. The three payments are 
necessity estimates and so may not be of equal amounts. 
This report covers payments made in the 2016 calendar year. As a result of the 
payment regimes these relate only in part to the tax due for that year and in part to 
previous year(s). 

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Decommissioning 
Decommissioning is an inherent cost of doing business in the UKCS. As a result, tax 
relief is given for decommissioning costs but not until they are incurred and the 
decommissioning is carried out. For accounting purposes a company is required to 
make an annual provision. However this cannot be deducted for tax purposes as the 
cash has yet to be spent, and the decommissioning has not actually happened). 
If decommissioning expenditure produces an overall loss for a year then, as 
explained above, the loss may be carried back against previous ring fence profits of 
that company, as far as 2002 for RFCT and SC, and almost indefinitely against field 
profits for PRT. Based on 2016 tax rates, losses generated by decommissioning 
costs and carried back to be offset against previous profits will be relieved at 32% for 
SC and 30% for RFCT. In most cases, the effective rate of tax relief for PRT fields is 
a maximum to 75%. The amount of relief available is limited to the taxable profits of 
the relevant field/company and in economic terms, represents a repayment of tax 
that has been overpaid through the profitable life of the company or field. 
An estimate of the likely cost to the Exchequer, based on current estimates of 
decommissioning costs is £24.2 billion.1 
Decommissioning Relief Deeds (DRDs) 
In 2013, following extensive discussions with industry, the government introduced 
legislation giving it the statutory authority to sign contracts (DRDs) with companies 
operating in the UKCS. The aim of the DRD is to provide certainty over the 
availability of decommissioning tax relief for the purposes of putting up security 
against the risk of default. 
The DRD works by guaranteeing the tax relief due on decommissioning expenditure, 
based on the relief available at Finance Act 2013 (FA13). It allows a company to 
claim a payment from the Exchequer if, as a result of changes to the tax system, the 
relief available to the company on its decommissioning expenditure is less than that 
which would have been due under the rules as at FA13 (However, this does not 
apply if the relief is less due to changes in tax rates.) The DRD will also pay out to a 
company that picks up the decommissioning liabilities of another company that has 
defaulted under its Petroleum Act 1988 obligations – for example if the company 
becomes insolvent – to ensure that the company incurring the default expenditure is 
able to get relief. This provides industry with certainty over the availability of 
decommissioning tax relief in future years and has unlocked additional investment 
capital in the UKCS by allowing companies to provide security for their 
decommissioning liabilities on a post-tax basis. 
                                            
1 Page 171 of HMRC’s 2016-17 Annual Accounts 
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/635587/HMRC_Annual
_Report_and_Accounts_2016-17_web_.pdf 

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Each year the Treasury reports to Parliament the number of Deeds it has entered 
into that year, the total number of DRDs in force, the number and amounts of any 
payments made under the Deeds and an estimate of the maximum amount liable to 
be paid1. 
Looking ahead 
In December 2014, the government published Driving Investment – a long-term plan 
to reform the oil and gas fiscal regime.2 The conclusion was that, although the 
fundamentals of the fiscal regime remained sound, significant change was needed 
within the ring fence in order to continue to attract investment. Some of the highlights 
from the plan are set out below: 
Policy-making principles 
Driving Investment established three principles for future policy-making, in order to 
balance the government’s twin objectives of maximising economic recovery of its 
hydrocarbon resources and achieving a fair return for the nation on those resources. 
Firstly, the overall tax burden would need to fall as the basin matured and new 
projects became ever more marginal. Secondly, when making judgments about fiscal 
policy, the government would consider the wider economic benefits of oil and gas 
production, such as jobs, investment and exports, in addition to revenues. Finally, 
when judging what constitutes a fair return for the nation, the government would take 
account of the global competitiveness of commercial opportunities in the UK and 
UKCS and take account of both commodity prices and costs. The government 
reaffirmed its commitment to these principles at Autumn Statement 2016.3 
Exploration - Driving Investment noted that exploration activity in the UKCS had 
been falling for some time. In 2016, the government announced £20 million funding 
for seismic surveys, in order to improve understanding of under-explored areas of 
the UKCS. The data from these surveys has been made available to industry and 
academia.4 
Infrastructure - The government considered options for reforming the fiscal 
treatment of infrastructure and consulted with industry in 2015. The government 
announced at Budget 2016 that it would extend the investment and cluster area 
allowances to cover tariff income. 
                                            
1 http://www.parliament.uk/business/publications/written-questions-answers-statements/written-
statement/commons/2018-03-27/HCWs590 
2https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/xx-xxxx-xxxx/PU1721_Drivi
ng_investment_-_a_plan_to_reform_the_oil_and_gas_fiscal_regime.pdf 
3 https://www.gov.uk/government/publications/autumn-statement-2016-documents/autumn-statement-
2016  
4 A further £20 million for a second round of seismic surveys was announced at Budget 2016. 

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Decommissioning - At Budget 2016, the government provided certainty that 
companies will be able to access tax relief on their costs when they retain 
decommissioning liabilities for an asset after a sale, to encourage new entrants for 
late-life assets and the development of late-life business models. This was provided 
by an HMRC technical note,1 published alongside the Budget. The government also 
announced it would build on the new decommissioning powers of the Oil and Gas 
Authority (OGA) by undertaking further work with the OGA and industry to reduce 
overall decommissioning costs, to deliver significant savings for industry and the 
Exchequer. If significant progress could be made, the government would explore 
whether decommissioning tax relief could better encourage transfers of late-life 
assets. 
2.2.8. The OGA Levy 
The OGA became an Executive Agency of DECC on 1 April 2015 and a 
Government-owned company on 1 October 2016. It is a not-for-profit company 
largely funded by fees for specific activities and by a per-licence levy, known as the 
OGA Levy, on offshore licence holders apportioned between in-production (89%) 
and pre-production (11%) licence holders. The OGA Levy was introduced with effect 
from 1 October 20152. As reported in the OGA’s accounts,3 it raised £8.231 million in 
2015/16 and £21,254 million in 2016/17; as reported elsewhere in this report, the net 
yield in calendar year 2016 was £21,268 million. 
2.2.9. Payments to The Crown Estate (TCE) 
Oil and gas companies make payments to TCE for pipeline easements. 
2.2.10. Shale gas 
Research by the BGS indicates that there are potentially large volumes of shale gas 
beneath the UK. Further exploration is required before the full extent of these 
resources is known and the amount of gas that is technically and commercially 
recoverable can be estimated. 
UK licence and fiscal terms do not generally differentiate between conventional and 
unconventional hydrocarbon activities. For example, the Onshore Allowance (an 
allowance against the SC which ensures that otherwise economic developments are 
not uncommercial) is applicable to both new conventional oil and gas as well as to 
shale gas developments. As PEDLs do not grant automatic rights to operations such 
                                            
1 https://www.gov.uk/government/publications/oil-and-gas-companies-tax-relief-for-decommissioning-
expenditure 
2 https://www.ogauthority.co.uk/regulatory-framework/legislative-context/industry-levy/ 
3 OGA, Annual Report and Accounts 2016–17 https://www.ogauthority.co.uk/news-
publications/publications/2017/oga-annual-report-and-accounts-2016-17/ 

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as drilling or hydraulic fracturing, any company looking to develop shale will also 
need to obtain all necessary permissions, like planning and environmental permits. 
In addition, a further range of measures specific to hydraulic fracturing and the shale 
industry have been put in place to ensure that exploration is safe and 
environmentally sound. The Infrastructure Act 2015 specifies thirteen conditions that 
need to be met before a hydraulic fracturing consent will be issued, including public 
notification and a scheme to provide financial or other benefit for the local area. The 
government has also put in place regulations which ensure that high-volume 
hydraulic fracturing cannot take place within 1,200 metres beneath the surface of 
National Parks, the Broads, Areas of Outstanding Natural Beauty, World Heritage 
Sites and areas that are most vulnerable to groundwater pollution. 
A number of companies holding PEDLs in England are developing shale gas 
projects. North Yorkshire County Council has granted Third Energy permission to 
hydraulically fracture an existing vertical well at its Kirby Misperton site, to give an 
early indication of flow rates.1 On 6 October 2016, the Secretary of State for 
Communities and Local Government published his decision on Cuadrilla’s appeals 
relating to exploratory wells, hydraulic fracturing and monitoring works at Preston 
New Road and Roseacre Wood, Lancashire.2 Nottinghamshire County Council has 
approved an application to drill an exploratory well at the Springs Road site.3 The 
application did not include plans for hydraulic fracturing. 
The government has announced that it will create a Shale Wealth Fund to ensure 
that communities which host shale sites can share the benefits of shale 
development. Funding for the Shale Wealth Fund will consist of up to 10% of tax 
revenues arising from shale gas production.4 On 25 October 2016, the government 
opened a consultation seeking views on the delivery method and priorities of the 
Shale Wealth Fund.5 
In the Autumn Statement 2016, it was announced that the Shale Wealth Fund will 
provide up to £1 billion of additional resources to local communities, over and above 
industry schemes and other sources of government funding. Local communities will 
benefit first and determine how the money is spent in their area. 
                                            
1 https://www.northyorks.gov.uk/kirby-misperton-fracking-operations 
2 https://www.gov.uk/government/publications/recovered-appeals-cuadrilla-bowland-ltd-and-cuadrilla-
elswick-ltd-refs-3134386-3130923-3134385-and-3130924-6-october-2016 
3 http://www.nottinghamshire.gov.uk/planning-and-environment/shale-gas-development/shale-gas-
development/latest-news/councillors-approve-planning-application-for-county-s-first-exploratory-
shale-gas-wells 
4https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/544241/shale_wealth_
fund_final_pdf-a.pdf 
5 https://www.gov.uk/government/consultations/shale-wealth-fund 

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2.3. Mining and Quarrying1 
2.3.1. Production 
The UK has relatively diverse and large deposits of minerals that have been 
historically mined. Key sectors include: 
•
energy minerals – coal;
•
construction minerals – aggregates, brick clay and cement raw materials;
•
industrial minerals – kaolin (china clay) and ball clay, silica sand, gypsum,
potash, salt, industrial carbonates, fluorspar and barytes;
•
metal minerals – tungsten, gold.
The largest bulk market for non-energy minerals is construction. Industrial minerals 
extracted and used in the UK range from those used primarily domestically (for 
example, silica sand and limestone for glassmaking, iron and steel manufacture) and 
minerals such as kaolin, ball clay and potash, which have significant international 
markets. Mineral production supports a wide variety of upstream, midstream and 
downstream industries. 
In recent years, an increase has occurred in UK mining and quarrying non-coal 
production, while coal production volumes have consistently fallen for the past two 
decades. Output of non-coal mining and quarrying has grown substantially since 
2010, although GVA fell in 2016 (Figure 15). 
1 Unless noted otherwise, in this section “mining and quarrying” includes coal but excludes oil and gas 
extraction. 

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Figure 15. GVA of UK mining and quarrying (excluding oil and gas) 1990–20161 
Source: ONS. 
The UK Minerals Yearbook 2015 includes 2014 value-of-production data for 
individual minerals.2 Production volumes for specific minerals are provided in sub-
section 2.3.5 below. 
2.3.2. Balance of trade 
Although the UK has significant domestic supply of some minerals, it is a net 
importer of many minerals and mineral-based products, particularly metals, and in 
the long term has experienced a balance of trade deficit. UK mineral exports and 
imports have both increased in recent years. In 2014, the value of total UK exports of 
minerals and mineral products was £66.1 billion and imports £85.6 billion. Excluding 
hydrocarbons and coal, exports of other minerals and mineral products were valued 
at £32.7 billion and imports of other minerals and mineral products valued at 
£37.7 billion. Imports and exports of the largest minerals flow, aggregates, are 
relatively low, accounting for less than 5% of the market.3 
Export data for specific minerals are provided in sub-section 2.3.5. 
                                            
1 Source: ONS, UK GDP(O) low level aggregates, published 29 March 2018; 
https://www.ons.gov.uk/economy/grossdomesticproductgdp/datasets/ukgdpolowlevelaggregates 
2 BGS, June 2016, United Kingdom Minerals Yearbook 2015, 
http://www.bgs.ac.uk/downloads/start.cfm?id=3094 
3 BGS, June 2016, United Kingdom Minerals Yearbook 2015, 
http://www.bgs.ac.uk/downloads/start.cfm?id=3094 

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2.3.3. Legal framework 
Planning 
Extraction of minerals is subject to the UK’s mineral planning process.1 The aim of 
mineral planning is to meet the social, economic and environmental cost, while 
protecting conservation or heritage areas. Mineral working is not a permanent use of 
land, and extraction sites are usually restored for beneficial after-use. 
Mineral planning policy is devolved and set out in the National Planning Policy 
Framework (England),2 Planning Policy Wales3 and National Planning Framework for 
Scotland 3.4 In Northern Ireland, policy and guidance are provided through 
documents such as the Strategic Planning Policy Statement for Northern Ireland,5 
which partly supersedes the Planning Strategy for Rural Northern Ireland.6 In 
Northern Ireland since 1 April 2015 responsibility for planning is shared between the 
Department of the Environment7 (from 8th May 2016 in respect of planning, the 
Department of Infrastructure)8 and the eleven local councils.9 Exploration for and 
extraction of metalliferous and industrial minerals are licensed by the Department for 
the Economy in Northern Ireland under the Mineral Development (Northern Ireland) 
Act 1969.10The UK framework is supported by technical documents providing 
guidance on particular issues of mineral planning. The focus of the mineral planning 
process is on whether the development itself is an acceptable use of the land.11 
                                            
1 See BGS, Planning, https://www.bgs.ac.uk/mineralsuk/planning/home.html 
2 Department for Communities and Local Government (DCLG), 2012, 
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/6077/2116950.pdf 
3 Welsh Government, 2001, http://gov.wales/topics/planning/policy/minerals/?lang=en 
4 Scottish Government, 2015, http://www.gov.scot/Publications/2014/06/3539  
5 http://www.planningni.gov.uk/index/policy/spps.htm 
6 Northern Ireland Department of the Environment, 1993, 
http://www.planningni.gov.uk/index/policy/rural_strategy.htm 
7 Departments Act (Northern Ireland) 2016 http://www.legislation.gov.uk/nia/2016/5/contents; The 
Departments (2016 Act) (Commencement) Order (Northern Ireland) 2016 
http://www.legislation.gov.uk/nisr/2016/89/made; The Departments (Transfer of Functions) Order 
(Northern Ireland) 2016 http://www.legislation.gov.uk/nisr/2016/76/contents/made 
8 https://www.infrastructure-ni.gov.uk/; Department of Infrastructure planning page, 
https://www.infrastructure-ni.gov.uk/topics/planning 
9 https://www.communities-ni.gov.uk/publications/local-government-maps 
10 https://www.legislation.gov.uk/apni/1969/35 
11 For environmental issues that may be considered during the planning process, see DCLG, 
Assessing environmental impacts from minerals extraction, 
http://planningguidance.planningportal.gov.uk/blog/guidance/minerals/assessing-environmental-
impacts-from-minerals-extraction/ 

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Mineral planning and decisions on planning applications are a responsibility of a 
local authority body designated as the Mineral Planning Authority (MPA). In Wales, 
Scotland and some parts of England MPAs are Unitary Authorities. In Wales, 
National Parks are responsible for minerals planning. In most of England MPAs are 
the County Councils or National Parks. In Northern Ireland, the Minerals Unit, part of 
the Planning Service of the Department of the Environment, was responsible for 
minerals planning until 1 April 2015.1 
MPAs have four areas of planning responsibility: 
• 
planning to guide future developments; 
• 
safeguarding mineral resources; 
• 
managing developments by deciding on planning applications; and 
• 
monitoring and enforcement of existing planning permissions. 
Some minerals permissions last for many years, and there may be a need for 
periodic reviews of the planning conditions attached to that permission. MPAs control 
mineral developments under the orders established under the Town and Country 
Planning Act 1990 (Section 97, Part II of Schedule 5, and Schedule 9).2 
Minerals extraction may only take place if the operator has the agreement of the 
landowner and has obtained both a planning permission from the MPA and any other 
permits and approvals. The latter may include: 
• 
permits relating to surface water, groundwater and mining waste, issued by 
the Environment Agency (under UK legislation related to the EU Water 
Framework Directive and Mining Waste Directive); 
• 
where appropriate, European Protected Species Licences, issued by Natural 
England; 
• 
where appropriate heritage asset consents issued by Historic England; 
• 
licences for exploration and extraction of coal, or agreements to enter into or 
pass through a coal seam to extract any other mineral, need to be granted by 
the Coal Authority; 
                                            
1 The functions of the Department’s Strategic Planning Division Minerals Unit in Northern Ireland 
transferred to each of the 11 councils on 1 April 2015. Under the two-tier planning system, councils 
will be the determining planning authority for the vast majority of planning application, including 
mineral applications. Applications of regional significance will be submitted directly to the Department 
of the Environment. However, from 2016, applications in respect of planning should be submitted to 
the Department of Infrastructure under the provision set out in section 26 of the Planning Act 
(Northern Ireland) 2011. 
2 For more information see DCLG, Minerals planning orders, 
http://planningguidance.planningportal.gov.uk/blog/guidance/minerals/minerals-planning-orders/ 

UK EITI report for 2016 
 
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• 
licences for exploration and extraction of minerals managed by TCE need to 
be obtained from the latter.1 
Additional consents, such as relating to diverting and reinstating rights of way or 
temporary road orders, may need to be obtained. Additional rights of way and land 
use may need to be secured from landowners. Active mining and quarrying 
operations are also regulated by the Health and Safety Executive. 
Marine plans are being developed by each of the UK marine planning authorities in 
accordance with the requirements of the Marine and Coastal Access Act 2009 and 
the UK Marine Policy Statement. Each marine plan will set out policy to support 
public authorities determining licensing applications including those for marine 
minerals and oil and gas extraction.2 
A marine plan: 
• 
sets out priorities and directions for future development within the plan area; 
• 
informs sustainable use of marine resources; 
• 
helps marine users understand the best locations for their activities, including 
where new developments may be appropriate. 
Relevant public authorities must take their decisions in accordance with the relevant 
marine planning documents, i.e. the UK Marine Policy Statement and any marine 
plan prepared and adopted by the marine planning authority. 
Information about mineral planning and environmental permitting within the UK’s 
devolved administrations is available as follows: 
• 
Scottish Government, Guide to the Planning System in Scotland.3 
• 
Northern Ireland Environment Agency (NIEA) and Scottish Environment 
Protection Agency (SEPA), NetRegs: Environmental Guidance for Your 
Business in Northern Ireland and Scotland.4 
• 
Northern Ireland Planning Service, Minerals Planning.5 
• 
Welsh Government, Planning.6 
                                            
1 The Crown Estate (http://www.thecrownestate.co.uk) is an incorporated public body that manages 
the monarch’s property portfolio. 
2 http://www.gov.wales/topics/environmentcountryside/marineandfisheries/marine-planning/?lang=en; 
https://www.gov.uk/government/collections/marine-planning-in-england; 
http://www.gov.scot/topics/marine/seamanagement; https://www.daera-ni.gov.uk/articles/marine-plan-
northern-ireland 
3 http://www.gov.scot/Publications/2009/08/11133705/1 
4 http://www.netregs.org.uk/environmental-topics/useful-links/mining-and-quarrying/ 
5 http://www.planningni.gov.uk/advice_special_studies_minerals 
6 http://gov.wales/topics/planning/?lang=en 

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• 
Natural Resources Wales, Mining waste.1 
2.3.4. Licensing, fiscal regime and revenue streams 
Mineral ownership and licensing 
With the exception of oil, gas, coal, gold and silver, mineral rights in Great Britain2 
vest in landowners rather than the state.  It follows that there is no single, national 
licensing system for the exploration and extraction of such privately owned 
minerals.  While planning permissions and environmental permits are generally 
required for such purposes, these are not licences. 
Where mineral rights belong to a private landowner, permission for exploration must 
be received from the landowner. As TCE and (in GB) the Forestry Commission 
manage land on behalf of The Crown, they also issue exploration and extraction 
licences for mineral deposits under their management and grant access right permits 
(wayleaves). In some cases, mineral rights can be managed by a private agent on 
behalf of a public body (TCE and Forestry Commission Scotland). 
Coal Authority 
The Coal Authority is a regulatory executive non-departmental public body, 
established in 1994 following privatisation of the industry and sponsored by BEIS.3 
The Authority owns, on behalf of the State, the majority of unworked coal and 
abandoned underground coal mine workings in GB and regulates and grants 
licences for working of coal and underground coal gasification (UCG), together with 
agreements to enter its coal estate for other processes such as coal bed methane 
extraction. 
The Coal Authority holds an offline public registry of licences and does not publish 
licences online. Information about coal licences can be requested by post and 
email.4 The Authority provides online coal mining data including on licence areas and 
known areas of activity.5 
                                            
1 https://naturalresources.wales/permits-and-permissions/waste/waste-permits/mining-
waste/?lang=en 
2 BGS, Legislation & policy: mineral ownership, 
https://www.bgs.ac.uk/mineralsuk/planning/legislation/mineralOwnership.html 
 
3 See https://www.gov.uk/government/organisations/the-coal-authority 
4 Contact details at https://www.gov.uk/government/organisations/the-coal-authority Information about 
coal licences (including Licensee details) can be viewed free of charge from the Coal Authority 
offices, but there is a charge if a copy is requested. Discussions are ongoing to set up an on-line 
electronic register. 
5 Coal Authority, https://www.gov.uk/government/collections/coal-mining-data 

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Coal Authority revenue streams include:1 
• 
fees for statutory licences, either operating or conditional (where the licensee 
is yet to secure planning permission) for surface and underground coal mining 
operations and UCG; 
• 
fees for licences for coal exploration; 
• 
production-related rents under coal leases which transfer the property interest 
in the coal to the licensee when holding an operating licence; 
• 
fees and royalties for digging and carrying away coal during non-coal-related 
development (Incidental Coal Agreement); 
• 
fees for agreements to access or pass through the Authority’s coal estate for 
processes such as coal bed methane and abandoned mine methane 
extraction, mine water heat recovery and deep energy exploitation (e.g. 
geothermal, shale gas); 
• 
payments for coal rights under options for lease (granted with conditional 
licences) and rights for pillars of support in coal. 
In 2015 the Authority received £238,000 for its licensing activities. This includes 
grant fees, application fees and annual fees. The amount remitted to BEIS in respect 
of rents, royalties and rights for its coal amounted to £863,000. 
At the end of March 2017, 10 surface mines were in operation under licences held by 
9 companies, and 3 underground mines were in operation under licences held by 3 
companies. In addition, there were 13 UCG licences held by 2 companies, but all 
were conditional licences and none was operational. 
Northern Ireland 
With certain exceptions, mineral rights in Northern Ireland are vested in the 
Department for the Economy (DfE).2 The DfE publishes a description of the process 
for the award of Mineral Prospecting Licences (MPLs) and consults publicly on 
applications.3 Applications are accepted on a “first come, first served” basis, 
although there is provision for a competitive process where there is more than one 
interest in an area. In 2015/16 there were two applications for mineral exploration 
licences and DfE did not grant any exploration licences. 
                                            
1 Coal Authority, https://www.gov.uk/government/organisations/the-coal-authority/about/about-our-
services 
2 Mineral Development (Northern Ireland) Act 1969, 
http://www.legislation.gov.uk/apni/1969/35/contents 
3 DfE, Mineral Licences - Guidance for Applicants, Minerals licensing, https://www.economy-
ni.gov.uk/articles/minerals-licensing 

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The Crown Estate: marine licences 
TCE manages the seabed to the 12-nautical mile territorial limit and non-energy 
mineral rights out to 200 nautical miles.1 TCE typically awards, through a market-
based tendering process, commercial agreements to companies to explore for or 
extract marine aggregate minerals, and it collects royalties for minerals extracted. All 
licensed application and exploration/option marine aggregate area details are 
published online and are available at no charge. TCE does not disclose contracts 
and agreements relating to minerals where they contain commercially confidential 
information.  
Such rights and options can only be exercised once the necessary regulatory 
consent (marine licence) is obtained under the Marine and Coastal Access Act 2009 
from the national regulator – the Marine Management Organisation (MMO) in 
England, Natural Resources Wales (NRW), Marine Scotland or in Northern Ireland 
the Department of Agriculture, Environment and Rural Affairs (DAERA) – according 
to location.2 All regulators are required to keep a public register of marine licences 
they have issued.3 Applications for marine licences must be publicised to allow 
anyone who is interested a chance to object.4 
Revenue streams for marine aggregates comprise: 
• 
marine licence payments of fees and relevant charges to the relevant 
regulator; 
• 
rent and production royalty payments to TCE.5 
                                            
1 http://www.thecrownestate.co.uk/ 
2 British Marine Aggregate Producers Association (BMAPA), Licensing and regulation, 
http://www.bmapa.org/regulation_and_management/licensing_and_regulation.php; the MMO is an 
executive non-departmental public body sponsored by the Department for Environment, Food & Rural 
Affairs: see https://www.gov.uk/government/organisations/marine-management-organisation 
3 England: 
https://marinelicensing.marinemanagement.org.uk/mmo/fox/live/MMO_PUBLIC_REGISTER; Wales: 
https://naturalresources.wales/media/4986/applications-received-and-determined-july-2015.pdf; 
Scotland: http://www.gov.scot/Topics/marine/Licensing/marine/register; Northern Ireland: the 
functions and services delivered by Department of the Environment have been transferred to new 
Northern Ireland departments. A register of licensing information is available for inspection at all 
reasonable times by members of the public free of charge. Contact Marine Strategy and Licensing 
Branch or the Northern Ireland Environment Agency (NIEA), Marine Dredging. https://www.daera-
ni.gov.uk/northern-ireland-environment-agency 
4 UK Environmental Law Association, Marine Licensing, 
http://www.environmentlaw.org.uk/rte.asp?id=275 
5 Royalty rates vary between licences and are commercially confidential. Companies also pay “dead 
rent”, a standard minimum annual fee payable to TCE if no dredging has occurred within the past 12 
months. 

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TCE manages mineral rights to potash mined from beneath the UK seabed. 
Currently only one operating mine pays royalties for potash mined offshore (Boulby, 
operated by Cleveland Potash); there is also a lease (York Potash) on which 
planning approval has been granted but extraction has yet to start. Fees and 
royalties received by TCE are negotiated directly. Rock salt is a by-product of potash 
mining at Boulby, with arrangements analogous to those for potash (royalty fees to 
TCE for minerals mined from the offshore section of the mine) in place. 
The Crown Estate: terrestrial minerals 
TCE has also granted mineral leases across the UK for land based mineral 
extraction operations, including sand, gravel, hard rock, dimension stone and slate. It 
charges royalties for minerals extracted. Lease conditions and royalty payment 
provisions are negotiated on an open market and case-by-case basis. TCE also 
manages the right to gold and silver (“Mines Royal”),1 but there is no significant gold 
or silver production in the UK. However in Northern Ireland under the Mineral 
Development (Northern Ireland) Act 19692 with certain exceptions (exceptions which 
includes gold and silver) all mineral rights are vested in the Department for the 
Economy (DfE). Since 1970 the mineral rights specified in the 1969 Act are held in 
public ownership. 
Local Planning Authorities (planning obligations payments) 
Planning obligations are agreements made between a planning applicant (including 
the freehold owner of land where the operator only has a minerals lease) and a Local 
Planning Authority (LPA) under section 106 of the Town and Country Planning Act 
1990 in England and Wales, section 75 of the Town and Country Planning (Scotland) 
Act 1997 (as amended by the Planning etc. (Scotland) Act 2006) in Scotland and 
Article 40 of the Planning (Northern Ireland) Order 19913. Planning obligation 
payments are site-specific and negotiated case by case. They may comprise: 
• 
monetary payments to LPAs; or 
• 
“in-kind” infrastructure provisions: mainly off-site provisions, (on-site 
provisions within the boundary of a planning permission are theoretically 
possible but more likely to be included in planning conditions rather than 
under planning obligations). 
The difference between off- and on-site “in-kind” infrastructure provisions can be 
understood as between provisions that benefit the local community and those used 
by the extractive company itself. Only monetary payments and off-site provisions are 
in scope for the UK EITI. 
                                            
1 With an exception of a few places in Scotland, where mineral rights were transferred historically. 
2 http://www.legislation.gov.uk/apni/1969/35/contents 
3 http://www.legislation.gov.uk/nisi/1991/1220/contents 

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Planning obligations can be short term, such as obligations to carry out works before 
the extraction can take place, or long term, such as obligations to restore or provide 
after-care of extraction sites. 
Obligations are recorded in online planning registries kept by LPAs, but payments 
owed or made are not always recorded, and no central registry of such planning 
obligations or relevant payments exists. 
Fiscal regime 
Mining and quarrying companies pay corporation tax on their profits at the standard 
rate, unlike profits from oil and gas extraction, which are subject to Ring Fence CT 
regime. Profits from upstream and downstream activities are not separated, and 
such companies pay a single amount of CT on the profits arising from all their 
activities. It is therefore not possible to say how much of the taxes paid by the 
companies whose tax payments are reported here related to their extractive activities 
nor what the total of such taxes was (and therefore what proportion of the total is 
covered by this report). 
Companies based in the UK have to pay CT on all their taxable profits, wherever in 
the world those profits originate, although double taxation relief is available where 
appropriate to avoid the same profits being taxed twice. Companies not based in the 
UK, but with branches operating in the UK, have to pay CT on taxable profits arising 
from their UK activities. CT payments by mining and quarrying companies are 
included in the scope of the UK EITI. The figures reported are for total CT and 
include tax on both upstream and downstream activities. 
There are several other payment streams, such as the Aggregates Levy, which 
involve payments from extractive companies to the Exchequer. These are outside 
the scope of EITI as they are indirect taxes not direct taxes. They are documented 
by the ONS in its annual publications on environmental accounts and environmental 
taxes.1 
2.3.5. Mineral subsectors 
Coal 
The majority of coal output comes from surface mining (opencast) sites in Scotland, 
North East England and South Wales. At the end of March 2016 there were 21 
operating surface mines and no operating commercial-scale underground mines. UK 
coal production peaked in 1913 and has been contracting, with fluctuations, since 
                                            
1 http://www.ons.gov.uk/economy/environmentalaccounts/bulletins/ukenvironmentalaccounts/2016; 
https://www.ons.gov.uk/economy/environmentalaccounts/datasets/ukenvironmentalaccountsenvironm
entaltaxes; see also HMRC guidance, Environmental taxes, reliefs and schemes for businesses, 
https://www.gov.uk/green-taxes-and-reliefs/overview, and, in particular, Excise Notice AGL1: 
Aggregates Levy, https://www.gov.uk/government/publications/excise-notice-agl1-aggregates-
levy/excise-notice-agl1-aggregates-levy 

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the mid-twentieth century, with the sharpest decline in the 1990s. Electricity-
generating power stations currently account for most of the UK’s coal consumption. 
Output in 2016 was 4.12 million tonnes (4.1 million from opencast mines, 22 
thousand from deep mines).1 For data on value of production (GVA) and coal 
exports, see Section 2.1. 
Construction minerals 
Construction minerals include aggregates, brick clay and cement raw materials. 
Supply of aggregates includes crushed rock, sand and gravel (land-won and marine-
dredged) with significant contributions from recycled and secondary materials. Brick 
clay is an essential raw material for the manufacture of bricks; limestone and chalk 
are the primary materials for the production of cement. 
The aggregates industry produces crushed rock, sand and gravel. According to the 
Mineral Products Association, in 2016 the industry produced 169 million tonnes of 
primary aggregates (in addition to 64 million tonnes of recycled and secondary 
aggregates), 13 million tonnes of cementitious products and 1 million tonnes of 
dimension stone for construction uses in GB. In addition, 18 million tonnes of rock 
and 4 million tonnes of industrial sand for non-construction use in GB, and 5 million 
tonnes of clay, were extracted in 2014 for brick manufacture.2 The BGS does not 
record statistics on the value of production of construction minerals. Aggregates are 
the largest element of the supply chain of the construction industry, and fluctuations 
in construction have a large impact on demand and production. The market declined 
steeply following the 2008 economic crisis, but increased after 2012 and rose by 4% 
in 2016 There is evidence of a long-term decline in reserves of land-based sand and 
gravel, which could constrain supply if production continues to be greater than the 
approval of new reserves.3 
Most (64% of) UK primary aggregates production in 2015 took place in England, 
15% in Scotland, 11% in Northern Ireland and 9% in Wales.4 In 2015, 932 sq km 
(less than 0.1% of the total area of UK seabed) were licensed for dredging by TCE, 
1 BEIS, August 2016, Historical coal data: coal production, availability and consumption 1853 to 2015, 
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/548008/Coal_since_18
53.xls; see also BEIS September 2016, Coal in 2015, Energy Trends special feature article,
https://www.gov.uk/government/publications/energy-trends-september-2016-special-feature-article-
coal-in-2015; 
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/669750/Energy_Trends
_December_2017.pdf 
2 Mineral Products Association, The mineral products industry at a glance – key facts, 2016, 
http://www.mineralproducts.org/documents/Mineral_Products_Industry_At_A_Glance_2016.pdf, 
3 UK Minerals Forum, The future of our minerals: A summary report, November 2014, 
http://www.british-aggregates.co.uk/documentation/doc136_UKMineralsForumFINAL07112014(1).pdf 
4 Mineral Products Association, The mineral products industry at a glance, 
http://www.mineralproducts.org/documents/Mineral_Products_Industry_At_A_Glance_2016.pdf 

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57% of this off the east and south coasts of England from where the majority of 
aggregates are supplied to the construction market in London and the South East. 
The area dredged in the year, however, was significantly lower – 83 sq km, within 
which 90% of extraction effort (defined by hours dredged) occurred in an area of 32 
sq km.1 
The UK is a net exporter of aggregates, although both imports and exports represent 
less than 5% of UK markets. Because transport costs are a very significant factor for 
aggregates, most markets are local or regional, with relatively little international 
trade. Historically, the UK has been self-sufficient in the supply of primary 
aggregates due to significant geological resources and adequate reserves with 
planning permissions. Exports of UK aggregates were valued at £77.3 million in 
2014, compared with imports worth £39.4 million.2 
Industrial minerals 
Industrial minerals include a number of raw materials used in specialised processes, 
with notable production in the UK of the following.3 
Kaolin - Kaolin, also known as china clay, is a commercial clay with specialist 
applications in paper production, ceramics, cosmetics and other industries. UK 
deposits of kaolin are concentrated in Cornwall and Devon and world-class in terms 
of size and quality.4 
Production peaked in 1988 at 2.8 million tonnes but since then has declined to 940 
thousand tonnes in 2016, 90% of which was exported, mostly to Europe. 
Ball clay - Ball clay, another major industrial mineral, is produced in Devon and 
Dorset mainly for the manufacture of white ware ceramics. Production levels peaked 
between 2005 and 2008 at more than 1 million tonnes. In 2016, production was 
estimated at 753,000 tonnes. 
                                            
1 British Marine Aggregate Producers Association, Sustainable development report 2016, 
http://www.mineralproducts.org/documents/BMAPA_SD_Report_final_Feb17.pdf  
2 BIS, Monthly Bulletin of Building Materials and Components, 
https://www.gov.uk/government/collections/building-materials-and-components-monthly-statistics-
2012 
3 Sources of data in this sub-section include: BGS, UK Minerals Yearbook 2015 
https://www.bgs.ac.uk/downloads/start.cfm?id=3094; BGS, Mineral Planning Factsheets, 
https://www.bgs.ac.uk/mineralsuk/planning/mineralPlanningFactsheets.html; BGS, UK mineral 
statistics, https://www.bgs.ac.uk/mineralsuk/statistics/UKStatistics.html; UK Minerals Forum, Trends in 
UK Production of Minerals, 
http://www.ukmineralsforum.org.uk/downloads/Trends%20in%20UK%20Production%20of%20Mineral
s_08012014.pdf 
4 BGS, Mineral Planning Factsheet, Kaolin, https://www.bgs.ac.uk/downloads/start.cfm?id=1362 

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Potash - Yorkshire has one of the largest proven world deposits of potassium-rich 
minerals. There is one potash mine in the UK, at Boulby, Yorkshire, and in June 
2015 a planning application was approved for another mine in the North York Moors 
(NYM) National Park. Ninety per cent of potash mined in the UK is used for 
agricultural fertiliser production. Small quantities are also used in the pharmaceutical 
and chemical industries. Production of potash reached its record high of 1.04 million 
tonnes (refined potassium chloride) in 2003 but then declined. Current production 
(2016) is reported to be 432 thousand tonnes.1 
The Boulby mine, which produces salt in conjunction with potash, directly employs 
about 1,000 people, half of whom work underground.2 The mine that is to be 
established in the NYM National Park is expected to employ between 1,000 and 
2,000 people and could make the UK a major world exporter of potash.3 
Salt - England accounts for 95% of UK salt production, 80% of which takes place in 
Cheshire; the Boulby potash mine in Yorkshire is another large centre. About 70% of 
salt is extracted through solution mining, the rest mined as rock. County Antrim is the 
main area of salt production in Northern Ireland. Rock salt is primarily used for de-
icing roads and in agriculture. Brine salt is chiefly used in chemical industrial 
processes that require chlorine. An estimated 4.50 million tonnes of salt were 
produced in the UK in 2016. 
Silica sands contain a high proportion of silica and their properties make them 
essential for glass making and a wide range of other industrial and horticultural 
applications. UK production has declined from approaching 7 million tonnes in 1974 
to 3.9 million tonnes in 2014. Exports totalled 93,800 tonnes worth £5 million in 2014, 
with imports of 139,800 tonnes worth £15.6 million. Hydraulic fracturing for shale 
gas/oil could offer a significant new market. 
Gypsum - Natural gypsum is used in plaster, plasterboard and cement making and 
has historically been mainly extracted by mining in the UK. The amount extracted in 
the UK has declined appreciably because of the use of desulphogypsum derived 
from flue gas desulphurisation at coal-fired power stations. In 2016 the UK produced 
an estimated 1.2 million tonnes. 
Industrial and agricultural carbonates are important in iron and steel making, 
sugar refining and glass making, as fillers in various products, to reduce soil acidity 
in agriculture, and for flue gas desulphurisation in coal fired power generation. Total 
                                            
1 Company information. 
2 BGS Mineral Planning Factsheet, Potash, https://www.bgs.ac.uk/downloads/start.cfm?id=1367 
3 Company information; H. Pidd, “North York Moors potash mine gets £1.7bn go-ahead”, Guardian, 
30 June 2015, https://www.theguardian.com/environment/2015/jun/30/north-york-moors-potash-mine-
gets-17bn-go-ahead 

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industrial carbonates production peaked at around 11.5 million tonnes in the late 
1990s but was around 9 million tonnes in 2014. 
Fluorspar is the most important and only UK source of the element fluorine, most of 
which is used in the manufacture of hydrofluoric acid. It is extracted from the 
Southern Pennine ore field in the Peak District National Park. In 2016, 12,000 tonnes 
were extracted. 
Barytes is principally used as a weighting agent in drilling fluids used in hydrocarbon 
exploration, to which its fortunes have been linked. The major source comes from 
the Foss mine near Aberfeldy in Scotland. Production in 2016 was 56,000 tonnes. 
The above data are sourced from the BGS “World Mineral Production”1 publication 
and cover extraction from 2012–2016. 
Metal minerals 
Tungsten (wolfram) is an essential element in a range of industrial processes, 
valued for its high melting point, density and extreme strength. England hosts the 
world’s fourth largest known tungsten deposit – the Drakelands Mine near Plympton, 
Devon. This has been estimated to contain 318,800 tonnes of tungsten metal, or 
about 10% of the world’s known reserves, as well as an estimated 43,700 tonnes of 
tin. Production at Drakelands, historically known as Hemerdon mine, began in 2015 
after a 70-year break, operated by Australian company Wolf Minerals. This is the first 
significant new metal mine to open in the UK for 45 years. Production will take the 
form of open-pit mining, and the company predicts producing 5,000 tonnes of 
tungsten concentrate and 1,000 of tin concentrate each year, mainly for export.2 
2.3.6. Outlook 
Coal 
At the end of 2016 the UK had an estimated 61 million tonnes of coal reserves and 
resources at operating surface and underground mines together with those in the 
planning process. In addition, there were some 159 million tonnes of resources in 
projects at the pre-planning stage plus just under 3 billion tonnes of potential 
resources at identified projects developed to various stages in the past 30 years.3 
Construction minerals 
Following growth since 2012 construction activity has slowed down in 2017 and 
independent forecasts now suggest very modest growth between 2017 and 2019. 
                                            
1 http://www.bgs.ac.uk/mineralsUK/statistics/worldStatistics.html 
2 BGS, Mineral profiles, Tungsten, http://www.bgs.ac.uk/downloads/start.cfm?id=1981; Wolf Minerals, 
Drakelands Mine, http://www.wolfminerals.com.au/irm/content/drakelands-
mine.aspx?RID=324&RedirectCount=1 
3 Coal Authority, email communication. 

UK EITI report for 2016 
 
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Housebuilding remains positive but investment in commercial and industrial 
construction is expected to fall over the period. Plans for infrastructure investment in 
areas such as transport, energy and water are positive but there remains some 
uncertainty about the timing of some major infrastructure projects. 
Longer-term construction-related demand will depend on a variety of factors. 
Projected UK population increases to 2030 and higher planned investment in 
infrastructure projects suggest a continuing underlying need for construction activity 
and minerals. 
Although there may be a greater general focus on the use of recycled materials in 
aggregates markets, their use is already mature in domestic markets (in recent years 
recycled materials have made up an estimated 25% to 30% of the market in 
England, Wales and Scotland, over twice the European average). Therefore, 
demand for quarried and dredged aggregates is likely to remain significant. 
Geologically the UK has substantial resources of construction minerals, which will 
remain subject to planning approvals before they can be extracted. 
Industrial and metal minerals 
Future extraction trends for industrial minerals will depend on movements in UK and 
overseas markets and on the competitiveness of operating costs and the business 
environment in the UK. The recent opening of a globally significant tungsten mine in 
Devon and planning approval for a major new potash mine in the NYM illustrate the 
continuing importance of the UK as a mineral producer. 
As of December 2016, the proven reserve was 1.438 million ounces of gold. The 
total resource is currently 4.4 million ounces of gold in all categories at Curraghinalt1 
in Northern Ireland. For both aggregates and industrial minerals, future extraction 
trends will be linked to economic growth. The National Planning Policy Framework 
(NPPF) states in paragraph 142 that “Minerals are essential to support sustainable 
economic growth and our quality of life. It is therefore important that there is a 
sufficient supply of material to provide the infrastructure, buildings, energy and goods 
that the country needs. However, since minerals are a finite natural resource, and 
can only be worked where they are found, it is important to make best use of them to 
secure their long-term conservation.”2 
The NPPF also places an obligation on MPAs to plan for a steady and adequate 
supply of aggregates and industrial minerals. 
                                            
1 http://www.dalradian.com/curraghnalt-project/curraghinalt-deposit/default.aspx 
2 DCLG, NPPF, 2012, para 142, 
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/6077/2116950.pdf 

UK EITI report for 2016 
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2.4. Revenue Allocations 
The UK Government publishes full details of its income and expenditure (outturn 
figures, estimates and forecasts).1 Budget forecasting is overseen by the 
independent Office for Budget Responsibility.2 Government accounts are audited by 
the National Audit Office (NAO)3 and scrutinised by the Public Accounts Committee.4 
With very few exceptions, central government receipts are not hypothecated to 
specific items or types of expenditure. The only central government extractive 
revenues currently earmarked for specific UK programmes or geographic regions 
involve the allocation of a population-based share of income from seaward 
petroleum licences to the Northern Ireland Government, as required by section 2 of 
the Miscellaneous Financial Provisions Act 1968. The amount transferred in 2016/17 
was £1,738,000 (£1,600,000 in 2015/16).5 
In addition, as mentioned in sub-section 2.2.8, the OGA Levy part-funds the 
operation of the Oil and Gas Authority (OGA).6 The rates of the Levy are set by 
statutory instrument so have to be approved by Parliament. Any excess of income 
over expenditure is repaid to levy-payers which can result in net refunds for some 
levy-payers in a calendar year. The OGA is a vested company with operational 
independence from Government. However, the Secretary of State (SoS) for 
Business, Energy and Industrial Strategy is the company’s sole shareholder and is 
ultimately responsible to Parliament for the OGA; the OGA Board of Directors is 
accountable to the SoS. The Permanent Secretary of the Department for Business, 
Energy and Industrial Strategy (BEIS) is the Principal Accounting Officer for the OGA 
and is responsible to Parliament for any grant funding of the OGA; the OGA’s Chief 
Executive is responsible to the Permanent Secretary. The OGA’s Annual Report and 
Accounts are approved by the Board of Directors and the SoS.
1 See e.g. HM Treasury, Autumn Budget 2017, https://www.gov.uk/government/topical-
events/autumn-budget-2017  
2 OBR, http://obr.uk/ 
3 NAO, https://www.nao.org.uk/ 
4 Public Accounts Committee, http://www.parliament.uk/business/committees/committees-a-
z/commons-select/public-accounts-committee/ 
5 OGA, Annual Report and Accounts 2016–17 https://www.ogauthority.co.uk/news-
publications/publications/2017/oga-annual-report-and-accounts-2016-17/ 
6 DECC, Funding the Oil and Gas Authority, https://www.gov.uk/government/consultations/funding-
the-oil-and-gas-authority-consultation-on-levy-design; OGA, Annual Report and Accounts 2016–17, 
https://www.ogauthority.co.uk/news-publications/publications/2017/oga-annual-report-and-accounts-
2016-17/ 

UK EITI report for 2016 
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3.
APPROACH AND METHODOLOGY
3.1. Payment Streams 
In preparation for UK’s first EITI report, the Multi-Stakeholder Group (MSG) 
considered which revenue streams should be included within the scope of the 
reconciliation. A sub-group of the MSG prepared a paper listing potential revenue 
streams which could be included within the scope. The government agencies and 
MSG representatives from the extractive companies gave presentations to add 
context to the discussion of this paper. 
As a result, the MSG agreed that Ring Fence Corporation Tax, the Supplementary 
Charge, Petroleum Revenue Tax (PRT) and petroleum licence fees would be in 
scope for oil and gas companies for the UK EITI reconciliation exercise. It was also 
agreed that, for mining and quarrying companies, in addition to (mainstream) 
corporation tax, extractive-related payments to The Crown Estate (TCE) and the 
Coal Authority should be in scope. More detailed descriptions of the revenue 
streams can be found in the fiscal regime and revenue streams sub-sections in 
Chapter 2. 
For the second report, which covered the year 2015, the MSG added further revenue 
streams to the scope, namely the new OGA Levy and payments to TCE made by oil 
and gas companies in respect of pipelines (previously only payments made to TCE 
by mining and quarrying companies had been within scope). 
At the July 2017 MSG meeting, representatives agreed that, in relation to 2016, all 
payment streams from the second report should remain in-scope for reporting, 
together with Advance Petroleum Revenue Tax (APRT), which was to be combined 
with PRT for reporting purposes. Further details about these payments can be found 
below. 
3.1.1. Oil and gas sector 
The following revenue streams specific to UK oil and gas production are within scope 
for UK EITI: 
•
A combined total for Ring Fence Corporation Tax (RFCT) and the
Supplementary Charge (SC);
•
Petroleum Revenue Tax (PRT), including any Advance Petroleum Revenue
Tax (APRT) repayments received (by field);
•
Petroleum Licence Fees (by licence);
•
the OGA Levy; and
•
Payments to The Crown Estate in respect of pipelines operated by companies
that are engaged in UK extractive activities.

UK EITI report for 2016 
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The MSG decided that any interest or penalty payments should be included as an 
element of the payment (or repayment) with which they are associated. 
Larger oil and gas companies pay mainstream CT, RFCT and SC in instalments “in-
year” (based on estimates). A number of these instalments will consist of a single 
payment covering all three taxes, which are allocated only at a later date, too late to 
be included within the reconciliation. All three taxes are taxes on profits so can be 
treated as a single revenue stream for EITI purposes, but an additional complication 
arises because mainstream corporation tax paid by oil and gas producers is not 
related to their UK extractive activities and is therefore out of scope of the UK EITI so 
should not be reported. 
Companies were allowed to confirm the split between in-scope and out-of-scope 
payments (respectively RFCT and SC and mainstream corporation tax) themselves, 
with reconciliation focusing on the total payments. 
Accordingly, if the company/group has not tagged its RFCT/SC payments as distinct 
from its mainstream CT payments under the group payment arrangement (GPA) 
then they are to report the total payment made in the period. If tagging has been 
used, they are to report only the total tagged RFCT/SC payment. 
The MSG decided that PRT should be reported at the project level (i.e.by field). 
However, in practice many companies pay the liability for a number of fields in one 
payment, covering numerous projects. To accommodate the MSG’s decision, HMRC 
agreed to provide a breakdown of the cash payments received by company and by 
field and to provide these data to the IA. 
3.1.2.  Mining and quarrying sector 
The following revenue streams for the Mining and Quarrying sector are included 
within the scope for UK EITI: 
•
Corporation Tax;
•
Payments to the Coal Authority;
•
Payments to The Crown Estate (TCE); and
•
Monetary payments to Local Planning Authorities as part of planning
obligations.
As there is no central record of planning obligation payments, the MSG agreed these 
payments should be reported unilaterally by companies. Payments reported as 
having been made in 2016 amounted to £98,012. 
The MSG decided that any interest or penalty payments should be included as an 
element of the payment with which they are associated. 

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3.1.3. Miscellaneous 
For the avoidance of doubt, it is confirmed that the following categories of payment 
are not present in the context of the UK extractives sector: 
•
in-kind revenues;
•
infrastructure provisions;
•
barter arrangements;
•
transportation payments.
3.2. Government Agencies 
The Government Agencies required to report for UK EITI for 2016 were: 
•
Her Majesty’s Revenue and Customs (HMRC);
•
The Oil and Gas Authority (OGA);
•
The Crown Estate (TCE); and
•
The Coal Authority.
3.3. Materiality Threshold 
The MSG took an early decision to shadow the Reports on Payments to 
Governments Regulations 2014 where practicable.1 These regulations implement 
the 2013 EU Accounting Directive, which requires all EU large and publicly listed 
extractives companies to publish the payments they make to governments in all the 
countries where they operate. 
For the UK EITI, in line with the above regulations, the materiality threshold is set at 
£86,000 and will apply to each revenue stream at group level. The threshold applies 
to the net total of payments and repayments – once the threshold has been reached 
in a revenue stream, then all individual payments within that stream will be included. 
This means that individual payments below £86,000 are included within the revenue 
stream total once the threshold has been reached. 
3.4. Data Collection, Completeness and Reliability 
3.4.1. Taxpayer confidentiality 
Many countries have taxpayer confidentiality provisions within their legal 
frameworks. In the UK these provisions are set out in the Commissioners for 
Revenue and Customs Act 2005. The EITI Secretariat publishes guidance on how to 
address the issue of taxpayer confidentiality and this guidance was considered by 
both the MSG reconciliation sub-group and the full MSG. During the April 2014 MSG 
1 http://www.legislation.gov.uk/uksi/2014/3209/contents/made 

UK EITI report for 2016 
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meeting, representatives agreed to use a taxpayer waiver option with a preference 
for a standard waiver. 
The majority of companies provided confidentiality waivers to the IA in advance of 
the first year’s reconciliation conducted in 2015. The waivers were drafted to allow 
for their continued use in subsequent years and remain valid until withdrawn by the 
company. This means that new waivers are required only for companies that are 
participating in UK EITI for the first time. 
3.4.2. Identification of in-scope companies 
For 2016 payments, the MSG agreed on two different approaches for the 
identification of in-scope companies, the first relating to the oil and gas sector, the 
second relating to the mining and quarrying sector. 
Oil and gas companies 
HMRC provided the IA with a list of 42 oil and gas groups that had made material 
payments or received material repayments during 2016 relating to their upstream 
activities. 
At the July 2017 MSG meeting, representatives agreed to include only these 42 
companies making payments to HMRC in the reconciliation scope. With 
reconciliation of these companies’ payments to the OGA, this was expected to 
provide 98% coverage of payments across the sector.1 
Mining and quarrying companies 
Oil and gas production apart, there is no specific tax regime for the minerals sector in 
the UK. This means that mining and quarrying companies pay mainstream 
corporation tax on all their profits with no requirement to identify separately the tax 
paid on their extractive activities. Therefore, HMRC was not able to provide the IA 
with a list of mining and quarrying companies that made material payments in 2016 
for extractive activities, because the amounts paid to HMRC will often include a 
significant proportion of taxes on non-extractive activities. 
For payments in 2016, the MSG agreed to retain the approach adopted for payments 
in 2015. That resulting in the following being asked to participate in the UK EITI: 
•
17 companies that made material payments to TCE (as confirmed by TCE);
•
2 companies that made material payments to the Coal Authority (as confirmed
by the Coal Authority); and
•
3 additional companies as being the largest companies operating in the
aggregates sector.
1 The final (actual) reconciliation coverage was 98.79%. 

UK EITI report for 2016 
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The mining and quarrying sub-group proposed this methodology at the July 2017 
MSG meeting and this methodology was agreed. The list of 22 in-scope companies 
was provided to the IA and reporting templates and confidentiality waivers were sent 
to those mining and quarrying companies. 
3.4.3. Collection of company payment data 
The MSG developed instructions for reporting companies, including templates and 
guidelines, which can be found here: https://www.gov.uk/guidance/extractive-
industries-transparency-initiative. 
The reporting package included: 
•
Reporting template;
•
EITI (Step-by-step) guide;
•
Beneficial ownership guide; and
•
Confidentiality waiver.
Reporting templates used in the reconciliation exercise are detailed in Annex 2 to 
this report. 
The reporting template was sent electronically to all extractive companies by the end 
of August 2017. This included 64 companies in total: 42 oil and gas companies and 
22 mining and quarrying companies. Extractive companies were asked to report 
directly to the IA using the email address xxx@xxx.xx, to which they 
were also requested to direct any queries on the reconciliation exercise. Extractive 
companies were also encouraged to visit the UK EITI website for information and 
guidance on the EITI process. 
3.4.4. Data reliability and credibility 
At the September 2015 MSG meeting, representatives discussed whether to require 
additional assurance on the figures provided from both companies and government 
agencies. Papers about audit and accountancy requirements for companies 
(Companies Act and Overseas Companies Regulations) as well as on the statutory 
requirements for government agencies were discussed. 
MSG representatives concluded that companies and government agencies are 
subject to robust regulatory requirements and that no additional audit and assurance 
should be requested for EITI purposes. 
Extractive companies were asked to have their reporting templates signed by a 
senior official. All reporting templates received were duly signed. 
For government agencies, the MSG accepted that rules of government accounting in 
the UK applied and the data to be reported was agreed with the IA in most instances. 

UK EITI report for 2016 
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The IA concluded that the final assessment of the overall comprehensiveness and 
reliability of reconciled financial data from companies and government agencies to 
be satisfactory. 
3.5. Reconciliation Scope and Methodology 
3.5.1. Analysis of the reconciliation scope 
The IA undertook a preliminary analysis in accordance with their Terms of Reference 
(ToR) for the purpose of reviewing the scope of the reconciliation exercise for the 
2016 calendar year. This preliminary analysis covers the UK’s extractive industries 
and related entities (government agencies and extractive companies). 
The preliminary analysis, much of which had taken place the previous years for the 
reports on 2014 and 2015, included: 
•
acquiring a good understanding of the extractive resources and industries of
the country;
•
reviewing the fiscal regime and other relevant revenue streams applicable to
the extractive sector;
•
reviewing existing data from the relevant period to determine significant
revenue streams;
•
reviewing materiality thresholds for revenue streams set by the MSG;
•
identifying extractive companies which make material payments within the
scope of the agreed material revenue streams;
•
identifying government agencies which collect material revenues within the
scope of the agreed material revenue streams;
•
reviewing the reporting template to be used; and
•
acquiring a good understanding of assurances to be provided by reporting
entities to ensure the credibility of the data made available.
The IA also contacted several entities involved in the EITI process in order to collect 
relevant information and documentation necessary to achieve the objectives. 
The reconciliation of cash flows for the year ended 31 December 2016 is based on 
the reconciliation scope approved by the MSG. 
3.5.2. Reconciliation process 
The reconciliation process consisted of the following steps: 
•
analysis of the reconciliation scope prepared by the MSG;
•
collection of payment data from government agencies and extractive
companies which provide the basis for the reconciliation;

UK EITI report for 2016 
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•
comparison of amounts reported by government agencies and extractive
companies to determine if there were discrepancies between the two sources
of information; and
•
contact with government agencies and extractive companies to resolve the
discrepancies.
3.5.3. Material deviation
The MSG agreed in November 2016 that the IA should reconcile differences for any 
specific company payment or for any revenue stream per company of over 1% or 
£10,000, whichever was the lower. 
3.5.4. Adjustments to the EITI Reconciliation Scope 
The number of in-scope companies was adjusted slightly during the 
reconciliation exercise. The changes are detailed as follows: 
Sector 
Initial number 
of companies 
Adjustments 
Adjusted number 
 of companies 
(+) 
(-) 
Oil & Gas 
42 
1 
41 
Mining & Quarrying 
22 
1 
3 
20 
Total 
64 
1 
4 
61 
Oil & Gas sector 
One company that was sent reporting templates was excluded from the EITI scope 
because it made/received no material payments/repayments during the calendar 
year 2016. 
Mining & Quarrying sector 
Two companies that were sent reporting templates were excluded from the EITI 
scope because they made/received no material payments/repayments during the 
calendar year 2016 while a third turned out to be a part of a group that was already 
in-scope. 
One company was added when it was realised that its payments exceeded the 
materiality threshold. 
The final number of companies included in the EITI reconciliation scope was 
therefore 61.1 
1 Three companies did not participate in the reconciliation exercise, all of them mining & quarrying 
companies, giving an overall participation rate of 95%.  

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3.6. Beneficial Ownership 
The UK EITI MSG agreed to incorporate beneficial ownership (BO) disclosure from 
the first report and as an ongoing reporting requirement. Accordingly, companies 
reporting under the UK EITI were asked to disclose their beneficial owners, that is, 
the identity of the people who ultimately own and control each company. 
The approach to BO for UK EITI is aligned with the related provisions of the Small 
Business, Enterprise and Employment Act 2015.1 Since 30 June 2016, companies 
incorporated in the UK are required to submit information to Companies House on 
people with significant control (PSC) along with a statement of confirmation.2 Under 
the UK EITI, companies that have filed this information at Companies House were 
permitted to confirm their filing and provide the link to the relevant page at 
Companies House as a way of disclosing Beneficial Ownership (BO). 
Publicly listed companies were asked to confirm their listed status, because they are 
already required to provide ownership information under stock exchange 
requirements. Private companies are asked to identify the owners who exercise 
control or receive economic benefits from the company. This control or benefit could 
be represented by owners having shareholdings of 25% or more or be exercised 
through one or more intermediary companies (trusts or company partners) or by 
other means. 
Private companies are also asked to disclose information on any owners who are 
identified as “politically exposed”, i.e. have political influence, or who, as family 
members or close associates, have links to senior political figures or government 
officials in the UK or abroad, and who have a share of 5% or more in the company. A 
senior company official is required to verify the information provided. 
Data collected on reporting companies’ BO and politically exposed persons is 
detailed in Annex 1 to this report. 
By 2020, all countries implementing the EITI will have to ensure that all oil, gas and 
mining companies that bid for, operate or invest in extractive projects in their country 
disclose their real owners. At the November 2016 MSG meeting, representatives 
agreed a roadmap towards fulfilling this obligation in the UK. The roadmap can be 
found on the UK EITI webpages.3 
3.7. Nature and extent of IA work 
The Independent Administrator (IA) has performed his work in accordance with 
the International Auditing Standards applicable to related services (ISRS 4400 
1 http://www.legislation.gov.uk/ukpga/2015/26/contents/enacted 
2  http://download.companieshouse.gov.uk/en_pscdata.html 
3 https://www.gov.uk/guidance/extractive-industries-transparency-initiative 

UK EITI report for 2016 
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Engagements to perform agreed upon procedures regarding Financial Information). 
The procedures performed were those set out in the terms of reference and 
approved by the MSG on 22 January 2015. 
The reconciliation procedures carried out were not designed to constitute an audit or 
review in accordance with International Standards on Auditing or International 
Standards on Review Engagements and as a result the IA does not express any 
assurance on the transactions beyond the explicit statements set out in this report. 
Had the IA performed additional procedures other matters might have come to the 
IA’s attention that would have been reported. 
3.8. Recommendations 
The IA provided recommendations where they noted deviations from the EITI 2016 
Standard or where they felt improvements would make the UK EITI reporting 
process more efficient and assist the MSG in its future reconciliation exercises. The 
IA’s recommendations are set out in Section 5.1 of this report. 

UK EITI report for 2016 
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4.
RECONCILIATION RESULTS
The detailed results of the reconciliation exercise are presented in the following 
tables with post-reconciliation differences noted between amounts reported as paid 
by in-scope extractive companies and amounts reported as received by government 
agencies. 
4.1.  Reconciled Extractive Payments to Government in 2016 by Oil & Gas 
companies 
As reported by Government Agencies 
Total 
reported 
by 
company 
Unreconciled 
difference 
£000 
RFCT & 
SC 
PRT 
Petroleum 
Licence 
Fees 
OGA 
Levy 
Payments
to TCE
Total 
Apache Corporation 
-30,261 
-51,591 
398 
375 
191 
-80,888 
-80,889 
0  
BHP Billiton Petroleum 
-14,843 
-1,120 
-15,963 
-15,959 
3 
BP UK Group 
-164,463 
4,733 
1,917 
467  -157,345 
-157,346 
-1 
CalEnergy Gas Ltd 
-187 
-964 
-1,151 
-1,152 
-1  
Centrica Energy E&P 
-14,331 
3,198 
1,773 
307 
-9,053 
-9,053 
0  
Chevron North Sea Ltd 
1,599 
-7,318 
1,450 
481 
-3,788 
-3,788 
0 
CNR International 
-64,647 
-91,237 
380 
585 
-154,920 
-154,920 
0 
ConocoPhillips UK Ltd 
30,273 
-30,320 
5,170 
1,768 
6,891 
6,890  
-1  
Dana Petroleum Ltd 
-1,324 
-1,999 
825 
576 
-1,922 
-1,916 
6  
Endeavour Energy UK Ltd 
-5,099 
111 
235 
-4,753 
-4,753 
0 
Engie E&P UK Ltd 
94 
2,839 
346 
3,278 
3,278 
0 
ENI UK Ltd 
24,682 
-2,916 
2,714 
321 
669 
25,470 
25,476 
6 
EnQuest PLC 
-1,631 
1,087 
716 
172 
171 
-1 
Europa Oil & Gas Ltd 
144  
144 
144 
0 
ExxonMobil International 
Ltd 
-68,734  -114,649 
-183,383 
-183,383 
0 
Faroe Petroleum PLC 
881 
1,153 
178 
2,212 
2,212 
0 
Hess Ltd 
-
141,959 
-4,225 
173 
195 
-145,815 
-145,815 
0 
Idemitsu Petroleum UK Ltd 
-1,114 
-724 
-1,838 
-1,838 
0 
IGas Energy PLC 
551 
802 
1,354 
1,354 
0 
INEOS Industries 
-907 
1,371 
439 
136 
1,039 
1,041 
2 
Ithaca Energy UK Ltd 
837 
498 
363 
1,698 
1,698 
0 
Ithaca SPL Ltd (formerly 
Summit Petroleum Ltd) 
-4,054 
-4,054 
-4,054 
0 
JX Nippon E&P UK Ltd 
-1,357 
248 
-1,109 
-1,109 
0  
Maersk Oil North Sea UK 
Ltd 
-12,000 
-29,746 
874 
236 
-40,636 
-40,636 
0  
Marathon Oil UK LLC 
29,537 
-5,511 
214 
178 
24,418 
24,418 
0  
Marubeni Oil & Gas UK Ltd 
-657 
-657 
-657 
0  
Mitsui E&P UK Ltd 
-4,714 
-4,714 
-4,714 
0 
Murphy Petroleum Ltd 
-299 
-299 
-299 
0 
Nexen Petroleum UK Ltd 
230,000 
-2,897 
5,285 
522 
232,910 
232,910 
0 
Oranje-Nassau Energie UK 
Ltd 
6,900 
1,727 
8,627 
8,627 
0 
Perenco UK Ltd 
11,693 
-216 
3,864 
1,559 
574 
17,474 
17,474  
0  

UK EITI report for 2016 
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As reported by Government Agencies 
Total 
reported 
by 
company 
Unreconciled 
difference 
£000 
RFCT & 
SC 
PRT 
Petroleum 
Licence 
Fees 
OGA 
Levy 
Payments
to TCE
Total 
Premier Oil PLC 
-4,701 
281 
2,394 
755 
-1,271 
-1,271  
0 
Repsol Sinopec Resources 
UK Ltd 
-12,650 
-58,829 
2,103 
1,795 
-67,581 
-67,581 
0  
Royal Dutch Shell PLC 
26,140  -149,592 
3,784 
2,442 
-117,226 
-117,226 
0  
Siccar Point Energy 
(Holdings) Ltd [incl. OMV 
(U.K.) Ltd] 
-8,423 
1,610 
-6,813 
-6,813 
0 
SSE E&P UK Ltd 
-4,468 
-4,468 
-4,470 
-2 
Statoil UK Ltd 
3,581 
1,272 
181 
5,034 
5,034 
0 
Suncor Energy UK Ltd 
198,686 
198,686 
198,686 
0 
TAQA Bratani Ltd 
41,423 
-29,458 
843 
442 
13,250 
13,252 
2 
Total E&P UK Ltd 
5,410 
-8,573 
4,270 
1,422 
189 
2,718  
2,717 
-1 
Tullow Oil PLC 
-839 
168 
195 
-476 
-476 
0  
Total 
241,189  -782,294 
53,831 19,994 
2,532  -464,748 
-464,736 
12 
4.2.   Reconciled Extractive Payments to Government in 2016 by Other Mining 
& Quarrying companies 
As reported by Government Agencies 
Total reported 
 by company 
Unreconciled 
 difference 
£000 
Mainstream 
 Corporation Tax 
Payments 
 to TCE 
Total 
Aggregate Industries UK Ltd 
13,499 
251 
13,750 
13,750 
0 
Breedon Group PLC 
9,030 
393 
9,423 
9,423 
0 
Brett Group 
1,100 
0 
1,100 
1,100 
0 
Britannia Aggregates Ltd 
0 
421 
421 
421 
0  
Cemex UK Materials Ltd 
0 
5,390 
5,390 
5,390 
0 
Cleveland Potash Ltd 
0 
1,744 
1,744 
1,753 
9 
DEME Building Materials Ltd 
0 
828 
828 
828 
0 
Garreg Lwyd Energy Ltd 
0 
459 
459 
459 
0 
Hanson UK Group 
0 
4,266 
4,266 
4,266 
0 
Irish Salt Mining & Exploration Co. Ltd 
903 
0 
903 
903 
0 
Kendall Bros (Portsmouth) Ltd 
441 
311 
752 
753 
1 
Llanelli Sand Dredging Ltd 
0 
124 
124 
124 
0 
Severn Sands Ltd 
100 
187 
287 
287 
0 
Tarmac Holdings Limited 
4,492 
4,350 
8,842 
8,839 
-3 
Van Oord UK Ltd 
2,209 
400 
2,609 
2,609 
0 
Volker Dredging Ltd 
0 
2,011 
2,011 
2,011 
0 
Westminster Gravels Ltd 
1,005 
1,076 
2,081 
2,081 
0 
Total 
32,779 
22,213 
54,992 
54,999 
7 
There were additional, relatively minor, payments reported by the relevant 
government agencies for companies that were in scope but whose payments were 
below the agreed materiality thresholds and for in-scope companies that did not 
participate in the reconciliation process. The totals of such payments are reported in 
the tables in the Executive Summary and, for petroleum licence fees and the OGA 
Levy, are included in the online disclosure of project level payments and repayments 

UK EITI report for 2016 
 
| P a g e  80 
at https://www.gov.uk/government/publications/extractive-industries-transparency-
initiative-payments-report-2016, which also includes reconciled field level data on 
Petroleum Revenue Tax and project-level payments to TCE. 
Separate to the UK EITI payment reconciliation exercise and complementing the 
information in this report, a number of companies have reported their 2016 payments 
to governments around the world, including to UK government entities, under the EU 
Accounting and Transparency Directives.1 
 
                                            
1 Data can be extracted from https://extractives.companieshouse.gov.uk/search?query=c 

UK EITI report for 2016 
 
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5. 
IA’S RECOMMENDATIONS TO THE MSG 
 
We present in the section below additional measures we recommend should be 
implemented in order to improve the UK EITI process. 
Follow-up to the IA’s recommendations made in previous EITI Reports is presented 
in the annual progress report.1 
5.1. 
Lessons Learned from the 2016 EITI Reconciliation Exercise 
5.1.1 Reconciliations issues 
During the reconciliation exercise, we identified some discrepancies that arose due 
to a variety of different reasons, viz: 
• some licensees reported payments that were not licence fees or the OGA 
Levy; 
• some participants incorrectly reported payments related to Research and 
Development Expenditure payments, which fall outside the reconciliation 
scope; 
• some payments and repayments of interest and APRT were omitted. 
These discrepancies were identified and reconciled. 
In order to avoid such issues in further reconciliation exercises, we recommend that 
the MSG considers updating the guidance notes and adding payment definitions in 
the reporting templates for 2017. It is also recommended to carry out a webinar for 
reporting entities to avoid any misunderstandings and improve the quality of the 
templates submitted. This should make the reconciliation process more efficient. 
5.1.2 Implementation of automated online disclosure 
According to EITI Requirement 7.2.c, the MSG is encouraged to consider automated 
online disclosure of extractive revenues and payments by Government Agencies and 
companies on a continuous basis. 
We note that HMRC, the main Government Agency involved in the reconciliation 
exercise, does not publish its payments/repayments due to taxpayer confidentiality 
issues. 
The MSG should be encouraged to explore opportunities to disclose data as soon as 
practically possible, for example through continuous online disclosures or, where 
possible, by publishing additional, more recent, non-financial EITI data than covered 
by the accounting period. 
                                            
1https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/66
7231/uk-eiti-progress-report-2016.pdf 

UK EITI report for 2016 
 
| P a g e  82 
To achieve this, we recommend that the MSG considers the following: 
i. 
Reporting entities 
The MSG may consider either unilateral disclosure by Government Agencies or 
asking extractive companies to disclose their payments as well. 
ii. 
Frequency of the automated online disclosure 
The MSG should agree on the frequency of the automated online disclosure. This 
can be done on a monthly, quarterly, or half-yearly basis. 
iii. 
Technical feasibility 
A detailed study should be carried out in order to obtain a full understanding of the 
technical abilities of the reporting entities to disclose their interim data. 
iv. 
Legal feasibility 
A detailed study should be carried out in order to obtain a full understanding of the 
legal obligations of the reporting entities to disclose their interim data. 
5.1.3 Late and no submission of templates 
50 out of 61 companies submitted their reporting template on or before the agreed 
deadline of six weeks as detailed below: 
Sector 
In-scope 
companies 
Submission 
on time 
Late 
submission 
No 
submission 
Oil & Gas 
41 
37 
4 
- 
Mining and Quarrying 
20 
13 
4 
3 
Total 
61 
50 
8 
3 
% 
100% 
82% 
13% 
5% 
For other companies frequent follow up by telephone calls and emails were required 
to obtain their completed reporting templates. 
As a result of the non-submission of the reporting templates by the three mining and 
quarrying companies, we were unable to confirm the totality of receipts reported by 
the Government Agencies. 
We recommend that the MSG considers the options available in order to try to 
achieve 100% on time submission by the reporting entities. One of the options to 
consider could include raising the awareness of the EITI programme. The UK 
Government could also consider regulatory (legal) mechanisms to impose EITI 
disclosure requirements on extractive companies. 
 
 

UK EITI report for 2016 
 
| P a g e  83 
ANNEXES 
 
 

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| P a g e  84 
Annex 1: Beneficial Ownership 
For all 58 reporting templates received, companies submitted a beneficial 
ownership declaration form. A total of 15 of these companies were privately held 
and made material payments to the UK Government under UK EITI. These 15 
companies are detailed in the table below. 
List of Privately owned companies making material payments which submitted a 
beneficial ownership declaration form. 
N° Company 
Sector 
Beneficial 
ownership 
disclosed for EITI 
purposes 
Information to 
Companies 
House on 
PSC? 
1 
Brett Group 
Mining and Quarrying 
No 
Yes 
2 
Britannia Aggregates Ltd 
Mining and Quarrying 
No 
Yes 
3 
Endeavour Energy UK Ltd 
Oil and Gas 
No 
No 
4 
Engie E&P UK Ltd 
Oil and Gas 
No 
No 
5 
INEOS Industries 
Oil and Gas 
Yes: Mr James 
Arthur Ratcliffe 
No 
6 
Irish Salt Mining and Exploration Co. Ltd 
Mining and Quarrying 
No 
Yes 
7 
Kendall Bros (Portsmouth) Ltd 
Mining and Quarrying 
No 
No 
8 
Korea National Oil Corporation 
Oil and Gas 
No 
No 
9 
Mitsui E&P UK Ltd 
Oil and Gas 
No 
No 
10 Oranje-Nassau Energie UK Ltd 
Oil and Gas 
Yes: Mr Martialis 
Quirinus Henricus 
van Poecke 
No 
11 Perenco UK Ltd 
Oil and Gas 
No 
No 
12 Severn Sands Ltd 
Mining and Quarrying 
No 
Yes 
13 Siccar Point Energy (Holdings) Ltd (incl. 
OMV (U.K.) Ltd) 
Oil and Gas 
No 
Yes 
14 Van Oord UK Ltd 
Mining and Quarrying 
No 
No 
15 Volker Dredging Ltd 
Mining and Quarrying 
No 
Yes 
No Politically Exposed Persons (PEPs) were disclosed. 

UK EITI report for 2016 
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Annex 2: Reporting Templates 
2016 Reporting Templates for Oil & Gas Companies 
Template 1 - Payments/Repayments in Calendar Year 2016 
Template for oil
 and gas companies - p
ayment
s/repayments 20
16
Template 2 - RFCT/SC Payments/Repayments in the Calendar Year 2016 Per 
GPA/Individual Company 
Template for oil an
d ga
s companies - RT
FC/
SC payments/repaym
ent
s 2016

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| P a g e  86 
Template 3 - PRT Payments/Repayments in the Calendar Year 2016 Per Field 
Template for oil an
d gas compan
ies - PRT pay
ments/repaym
ent
s 2016
Template 4 - Petroleum Licence Fee Payments/Repayments in Calendar Year 2016 
Template
 for oil and g
as companies
 - PLF 
pay
ments/repaym
ents 2016
Template 5: OGA LEVY Payments/Repayments in the Calendar Year 2016 
Template for oil an
d gas companies -
 OG
A Levy payments/rep
aym
ents 2016
Template 6: Payments to TCE in the Calendar Year 2016 
Template for oil an
d gas companies - paym
ents to 
TCE
 2016

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| P a g e  87 
2016 Reporting Templates for mining and quarrying Companies 
Template 1 - Payments/Repayments in the Calendar Year 2016 
Template for min
ing and quarrying comp
anies 
- payments/repa
yments 2
016
Template 2 - CT Payments/Repayments in the Calendar Year 2016 per 
GPA/Individual Company 
Template for mining and
 qua
rry
ing com
pan
ies
 - CT pay
men
ts/repaymen
ts 
2
016

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| P a g e  88 
Template 3 - Payments to the Coal Authority in the Calendar Year 2016 per Licence 
Temp
late for
 minin
g and quarr
ying companies 
- p
aymentsto Coa
l Authority 201
6
Template 4 - Payments to TCE in the Calendar Year 2016 
Template for mining and  quarrying companies - payments t
o TCE 20
16
Template 5 - S106 and Equivalent Payments to Local Authorities in the Calendar 
Year 2016 per Site 
Template for mining and  quarrying comp anies - S106 and
 equival
ent
 payments 
to 
local author
iti
e
s 2016

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| P a g e  89 
Beneficial ownership declaration form (for oil and gas & mining and quarrying 
companies) 
Company identification 
Full legal name of the 
company (including legal 
form) 
[Company name] 
Unique identification 
number (e.g. company 
registration number) 
[Unique identification number] 
  
Is the company a publicly listed company, or a wholly owned subsidiary of a 
publicly listed company? 
  
Yes – there is no need to complete the remainder of the form 
  
No – please go to the following question 
Is the company reporting payments to the UK Government under the UK EITI? 
(See Beneficial Ownership definition section for information on the materiality 
threshold) 
  
Yes – please go to the following question 
  
No – there is no need to complete the remainder of the form 
Has the company filed information to Companies House on people with 
significant control (PSC) as part of its confirmation statement? 
  
Yes – please provide a link to the confirmation statement and go to 
the section “Additional identification for Politically Exposed Person 
(PEP)" below. 
  
No – please complete the reminder of the form (Beneficial 
ownership and PEP identification).  
Contact address 
(registered office for 
companies) 
  
Declaration form 
prepared by 
[Name, Position, E Mail Address] 
(Sign or tick box:) 
Beneficial ownership definition 
In accordance with the EITI Standard, Requirement 3.11.d.i, a beneficial owner in respect of a company 
means the natural person(s) who directly or indirectly ultimately owns or controls the corporate entity. Further 
to Requirement 3.11.d and in accordance with the decision of the UK EITI MSG, for the purposes of the UK 
EITI and for non-PEP beneficial owners (as defined below), beneficial ownership declarations are only 
required in respect of beneficial owners who directly or indirectly ultimately own or control more than twenty-
five per cent (25%) of a company that (a) is reporting payments to the UK Government under the UK EITI and 
(b) is not a publicly listed company, or a wholly owned subsidiary of a publicly listed company. In connection 
with (a) above, companies will be asked to prepare a report under UK EITI if any reportable payment exceeds 
the agreed materiality threshold of £86,000. This threshold will be applied at the group level to each separate 
payment type. 
The >25% threshold is calculated by reference to the nominal value of the shares in the company in the case 
of a company with share capital. If the company does not have a share capital, this condition is met by an 
individual holding a right to share in more than 25% of the entity’s capital or profits. 
Control shall be defined consistently with the interpretative provisions applying to the new public register of 
persons with significant control of UK companies introduced in the Small Business, Enterprise and 
Employment Act 2015 (the “PSC Register”). 
A person with significant control over a company is defined as an individual that (either alone or as one of a 
number of joint holders of the share or right in question) meets one of the following conditions: 
1. The individual holds, directly or indirectly, more than 25% of the shares in the company. The 25% 
threshold is calculated with reference to the nominal value of the shares in the case of a company with 
share capital. If the company does not have a share capital, the condition is met by an individual 
holding a right to share in more than 25% of the entity’s capital or profits. 

UK EITI report for 2016 
| P a g e  90 
2. The individual holds, directly or indirectly, more than 25% of the voting rights in the company. Voting 
rights held by the company itself are disregarded for this purpose. 
3. The individual holds the right, directly or indirectly, to appoint or remove a majority of the board of 
directors of the company. 
4. The individual has the right to exercise, or actually exercises, significant influence or control over the 
company. (The Secretary of State for Business, Energy and Industrial Strategy is required to issue 
guidance on the meaning of ‘significant influence or control’ and regard must be had to that guidance 
in interpreting this condition). 
5. The trustees of a trust or the members of a firm that is not a legal person meet one or more of the 
other specified conditions in their capacity as such or would do if they were individuals, and the 
individual has the right to exercise, or actually exercises, significant control or influence over the 
activities of that trust or firm. 
Beneficial ownership disclosure 
Identity of beneficial owner 
  
Full name as it appears on national identity card   
Month and year of birth 
  
Nationality 
  
Country of residence 
  
Date when beneficial interest was acquired 
  
Service address 
  
 
Method of Control   
Select from: 
1. The individual holds, directly or indirectly, more than 25% of the shares in the 
company. The 25% threshold is calculated with reference to the nominal value of the 
shares in the case of a company with share capital. If the company does not have a 
share capital, the condition is met by an individual holding a right to share in more than 
25% of the entity’s capital or profits. 
2. The individual holds, directly or indirectly, more than 25% of the voting rights in the 
company. Voting rights held by the company itself are disregarded for this purpose. 
3. The individual holds the right, directly or indirectly, to appoint or remove a majority of 
the board of directors of the company. 
4. The individual has the right to exercise, or actually exercises, significant influence or 
control over the company. (The Secretary of State for Business, Energy and Industrial 
Strategy is required to issue guidance on the meaning of ‘significant influence or 
control’ and regard must be had to that guidance in interpreting this condition). 
5. The trustees of a trust or the members of a firm that is not a legal person meet one 
or more of the other specified conditions in their capacity as such or would do if they 
were individuals, and the individual has the right to exercise, or actually exercises, 
significant control or influence over the activities of that trust or firm. 
Politically exposed person (PEP) definition 
In accordance with the decision of the UK EITI MSG, for the purposes of the UK EITI, declarations are 
required in respect of PEPs who directly or indirectly ultimately own or control more than five per cent (5%) of 
a company that (a) is reporting material payments to the UK Government under the UK EITI and (b) is not a 
publicly listed company, or a wholly owned subsidiary of a publicly listed company. 
UK EITI has adopted the EU's definition of politically exposed person as described in the new EU Fourth 
Money Laundering Directive. The term ‘politically exposed person’ means a natural person who is or who has 
been entrusted with prominent public functions and includes the following: 
a) 
heads of State, heads of government, ministers and deputy or assistant ministers; 
b) 
members of parliament or of similar legislative bodies; 
c) 
members of the governing bodies of political parties; 
d) 
members of supreme courts, of constitutional courts or of other high-level judicial bodies, the 
decisions of which are not subject to further appeal, except in exceptional circumstances; 
e) 
members of courts of auditors or of the boards of central banks; 
f) 
ambassadors, chargés d’affaires and high-ranking officers in the armed forces; 
g) 
members of the administrative, management or supervisory bodies of State-owned enterprises; 
h) 
directors, deputy directors and members of the board or equivalent function of an international 
organisation. 
No public function referred to in points (a) to (h) shall be understood as covering middle-ranking or more junior 
officials. 

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| P a g e  91 
“Family members” includes the following: 
(i) the spouse; 
(ii) any person considered as equivalent to the spouse; 
(iii) the children and their spouses or persons considered as equivalent to the spouse; 
(iv) the parents. 
Persons known to be “close associates” means: 
(i) any natural person who is known to have joint beneficial ownership of legal entities or legal 
arrangements, or any other close business relations, with a person referred to in points (i) to (vii); 
(ii) any natural person who has sole beneficial ownership of a legal entity or legal arrangement which is 
known to have been set up for the benefit de facto of the person referred to in points (i) to (vii). 
The [>5%] threshold is calculated by reference to the nominal value of the shares in the company in the case 
of a company with share capital. If the company does not have a share capital, this condition is met by an 
individual holding a right to share in [more than 5%] of the entity’s capital or profits. 
Disclosures in relation to PEP beneficial owners reflect the actual knowledge of the company based on the 
information available to the company in the ordinary course of business, i.e. with no requirement for 
incremental due diligence. 
PEP disclosure 
Identity of PEP: 
Full name as it appears on national identity card 
  
Month and year of birth 
  
Nationality 
  
Country of residence 
  
Date when beneficial interest was acquired 
  
Service address 
  
 
Political Connection 
Name of public office holder 
  
Public office position and role 
  
Date when office was assumed 
  
Date when office was left, if applicable 
  
If the PEP beneficial owner is not the public office holder, PEP 
beneficial owner’s connection with the public office holder 
  
Attestation 
Select one of the following: 
1. Full Attestation 
“I, undersigned, for and on behalf of [company], confirm that all information provided in the above beneficial 
ownership declaration is, to the best of my knowledge, accurate and reliable.”  
Attestation prepared by:  
[Name, Position] 
Sign or tick box: 
  
 
2. Qualified Attestation 
“I, undersigned, for and on behalf of [company], confirm that all information provided in the above beneficial 
ownership declaration is, to the best of my knowledge, accurate and reliable, subject to the following 
qualifications: 
  
Information was not received from one or more beneficial owners; and/or 
  
One of more beneficial owners did not give satisfactory consent for the disclosure 
of information; and/or 
  
Other – please specify.” 
Attestation prepared by: [Name, Position] 
Sign or tick box: