This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Oil Taxation Manual

PRT: valuation of crude oils and products - category 1 Oil Forties blend sulphur de-escalator


In June 2007 the Price Reporting Agency Platts introduced a quality differential specific to Forties blend crude oil. Following a period of uncertainty, this change was reflected in the Shell standard forward contract (SUKO 90) in July 2007.

The new clause recognised that if the proportion of sulphur in the crude oil exceeded 0.6% then the buyer would be entitled to a discount of US 4 cents per barrel for every full increment of 0.01% (zero point zero one percent) over 0.6%. For example, if the sulphur assay showed that the proportion of sulphur was 0.629% then the buyer would get a discount of 8 cents per barrel. If the level rose to 0.63% then the discount would also rise to 12 cent per barrel.

The underlying cause was the introduction of Buzzard field into the Forties system. Buzzard crude oil had significantly more sulphur than other Forties blend fields and contributed a very large volume to Forties production. In the summer; when other fields shutdown for maintenance; the proportion of Buzzard would rise significantly with a commensurate increase in sulphur levels over the previous maximum of 0.6%.

For deliveries with NDDs on or after 1 July 2007, as long as a company provided evidence of the sulphur levels in a disposal (the normal quality assay on loading would provide this) then, for any NAL disposal, the statutory value of that cargo would be reduced by the amount of the de-escalator.


Since July 2007, Platts have changed the amount of the de-escalator, and LB Oil & Gas has accepted these de-escalation elements in NAL values as follows;

Platts’ Forties Sulphur de-escalator 

NDDs from to value\
cents LBS Oil & Gas letter to representative bodies dated      
  Jul-07 30 June 2008 40 18th July 2007 & 17th August 2007
  01 July 2008 30 September 2008 60 6th August 2008
  01 October 2008 31 December 2008 40 26th September 2008
  01 January 2009   20 23rd December 2008

For example, with a 40 cent de-escalator:

  Level of Sulphur % by mass US Cents per barrel
  0.61 4
  0.62 8
  0.63 12