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HMRC internal manual

Oil Taxation Manual

HM Revenue & Customs
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PRT: terminal liftings - how terminals (and offshore loading facilities) operate - the loading programme

In designing these rules LB Oil & Gas wanted to ensure that they followed as closely as possible the operational procedures that typically apply at the terminals or offshore loading facilities. The aim was to make it easier for companies to apply these rules operationally as well as for PRT purposes and thus minimise the burden upon the companies of complying with the rules.

It would be useful therefore to give an outline of the typical loading procedures. This will make it easier to understand some of the concepts underlying the rules. Note, however, that the comments that follow should not be viewed as a definitive guide to any particular terminal or offshore loading facility, as each one has its own specific rules and procedures.

Oil is normally delivered to the purchaser by being pumped on to an oil tanker at the terminal or offshore loading facility. The logistics of chartering (if necessary) and transporting the ship to the loading facility for loading and onward transportation, means that both the seller and buyer need to be given sufficient notice of when the oil is due to be loaded on to the ship to make the necessary arrangements. Furthermore the buyer needs to know when the oil is likely to load in order to decide whether or not to purchase the oil in question - if the buyer is a refiner he will want to purchase certain grades of oil at certain times to meet his customer demands and to suit the refinery set-up at that time. Also the seller needs to know how much oil he is likely to need to sell in the month. The terms of oil sales spot contracts (both forward and dated) reflect the purchaser’s information requirements. The dated contract will have a loading range (in which the oil being purchased is expected to load) on the face of the contract. The BFO forward contract requires the seller to notify the purchaser at least 21 days before the start of the projected loading date range for the cargo of the dates in question.

In order to facilitate this need for advance notice of the loading date ranges, operators of terminals and offshore loading facilities normally publish a schedule of loading ranges (normally 3-day day slots at the onshore facilities, but can be longer at some of the offshore ones) in which each producer in the blend is due to load the volumes assigned to it for loading in the month. This schedule is normally called the ‘loading schedule’. The final schedules for a month are normally published by the middle of the preceding month, but can be subject to further amendment by agreement between the parties.

The operator of the shipping programme for the facility constructs this schedule based upon the estimates of production from each of the producer’s field interests in the blend. Note that the shipping programme operator is typically the same person as the facility operator, but this is not always the case (e.g. Brent System). There is an iterative process whereby a producer provides forecasts to the shipping programme operator of its estimated share of production entitlements from its various field interests in the blend in future months. The first such forecast may be six months or longer before the month in question. These forecasts are refined progressively as a particular month approaches. Once a month has passed and actual production for that month has been determined, the terms of the commingling agreements (and the hydrocarbon accounting underlying them) are used to determine how much of the blend production in that month is attributable to each field and thus to each participator in that field.

Prior to a particular loading month the latest estimates of each producer’s share of production for that month (provided by the producers), together with (where applicable) the latest snapshot of that producer’s share of unlifted blend production from previous months will be used by the shipping programme operator to produce the loading schedule for that particular month. Note, if there is oil of that blend that the producer is entitled to lift under period of entitlement contracts, such oil will be included by the shipping programme operator in determining the quantities of oil and number of loadings that that producer will be assigned in the month in question. The procedure described above is, for some facilities, carried out in the month prior to the loading month (i.e. the programme for month M is set in month M-1). However, for some other systems the programme is set earlier (e.g. Brent and Forties set the programme for month M in month M-2). It is also possible that subsequent changes may be made to the original loading programme.

The schedules outline the loading volumes and loading ranges assigned to the various blend producers in the month in question. Although they can vary in format they might look something like this:


  Month M   600,000 bbls
  1-3 Shell 600,000 bbls
  4-6 BP 600,000 bbls
  7-9 ConocoPhillips 600,000 bbls
  10-12 ExxonMobil 600,000 bbls
  13-15 Chevron 600,000 bbls
  16-18 Eni 600,000 bbls
  19-21 Shell 600,000 bbls
  22-24 BP 600,000 bbls
  25-27 ExxonMobil 600,000 bbls
  28-30 Total 600,000 bbls



With declining production it is unlikely that such a full schedule would be required nowadays for UK blends. There are normally gaps in the schedule to allow for delays.


Once these schedules are published, the producers in question will either enter into contracts for the sale of this oil, notify counterparties who have purchased the oil under BFO contracts of the loading range of their purchase, or arrange for the transfer of the oil to affiliates for refining, or onward sale.

In pipeline systems where the producers have discretion over which of their field interests to assign to a lifting there is normally a requirement that the producer notify the facility and\or shipping programme operator some time in advance of a lifting which of its field interests (and the volumes in question) will be assigned to that lifting.

Most spot contracts under which the oil is sold provide a loading tolerance (for example, usually + / - 1% for BFO) against the standard contract volume size (normally 600,000 bbls). The purchaser has the option of asking for the volume it wishes to receive under the contract within this tolerance. Where this occurs the seller will normally have notified the facility and /or shipping programme operator of how it wants the volume the purchaser requests (whatever that might be) to be assigned to its various field interests (i.e. the percentages or specific volumes, as applicable, it wishes to go to each named field interest).

Invariably the amounts actually loaded will be different from that requested by the purchaser by relatively small amounts (think of it as a driver putting £30.05 petrol in his car rather than the £30 he intended, although the amounts could be less as well as over). To avoid practical difficulties arising from such occurrences the producer will normally identify which of its field interests in the blend will be assigned such amounts (sometimes called ‘balancing parcels’).