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HMRC internal manual

Oil Taxation Manual

PRT: valuation of crude oils and products - category 2 - Pierce

Crude oil Reference price Period used to calculate differential Minimum volume for calculation of differential
Pierce 212 FOB*** pricing based upon the NDD*. Rolling average of all AL cargoes in the 6 month period up to and including the month of lifting. 3 standard volume (200k bbls) AL cargoes**.
  • Where a reference price is stated, this will be based upon LB Oil & Gas’s published daily Brent values, with effect from 1 July 2006.

** Should the volume in the specified period be too small, include additional cargoes until the minimum volume has been achieved. The cargoes to use are those nearest to the specified period on a time basis.

Nearest on a time basis means;

  • for cargoes preceding the specified period; in reverse date order
  • for cargoes following the specified period ; in date order.

A cargo with the shorter time difference between it and the specified period will be used in preference to a cargo with a larger time difference, regardless of whether that cargo follows or precedes the period.

In case there are two cargoes with equal time difference, include both as additional cargoes

*** Where Pierce is sold CIF, the CIF element in the pricing formula will have to be identified and reported to LB OIL & GAS in the form PRT1A, to allow it to be removed from the calculation.