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Payments Data

In 2019, the extractives sector continued to make sizeable tax payments to the UK Government. However, principally in the context of oil and gas decommissioning activity, parts of the sector also received repayments from Government of tax paid previously where loss carry back for decommissioning costs reduced earlier years’ taxable profits. 

In order to improve public understanding of these payments, this report analyses these payments against each relevant tax and licence. The data is based on a reconciliation exercise where we asked companies to disclose their payments/repayments to HM Revenue & Customs (HMRC), The Crown Estate (TCE) or Crown Estate Scotland (CES) at group level above a threshold level (£86,000). Additionally, the reconciliation included companies that paid more than £1 million to the Oil & Gas Authority (OGA), even if the company did not make any other payment/repayment above a threshold. Government agencies were also asked to disclose what they receive from oil, gas, mining and quarrying companies. These figures were then reconciled by an independent administrator. The UK EITI website contains information on the oil and gas and mining and quarrying tax regimes.

This, our sixth reconciliation report, provides detailed information on and a reconciliation of payment streams between companies operating in the UK extractive sector and the relevant government agencies in 2019.

The reconciliation process consisted of the following steps:

  • analysis of the reconciliation scope prepared by the Multi-Stakeholder Group (MSG);
  • collection of payment data from government agencies and extractive companies which provide the basis for the reconciliation;
  • 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.

A total of 37 oil and gas companies and 17 mining and quarrying companies participated in compiling the report, with continuing high industry participation. This represents 99.30% of potential in-scope payments. We consider this to be a comprehensive picture as the vast majority of companies we approached provided their data. The MSG is grateful to all those companies that participated in the process this year. This report incorporates information collected up to 11 November 2020. Any information collected after this date has not been included in the report.

Scope

This year we have included the following payment streams:

  • Oil and gas sector: combined total for Ring-Fence Corporation Tax (RFCT) and Supplementary Charge (SC); Petroleum Revenue Tax (PRT) and Advance Petroleum Revenue Tax; Petroleum Licence Fees; the OGA Levy; and payments to The Crown Estate and Crown Estate Scotland in respect of pipelines operated by companies that are engaged in UK extractive activities. The MSG agreed that companies which paid more than £1 million to the Oil and Gas Authority (OGA) should also be included in the reconciliation.
  • Mining and Quarrying sector: Corporation Tax; extractive-related payments to The Crown Estate (TCE) and Crown Estate Scotland (CES); and monetary payments to local planning authorities as part of planning obligations.

Continuing to shadow the Reports on Payments to Government Regulations 2014, the materiality threshold remained at £86,000, applied to each revenue stream at group level. The government agencies required to report for 2019 UK EITI were HMRC, the OGA, TCE and CES.

Extractive Industries Payments to/refunds from UK Government

The two tables below summarise the reconciled extractive industries payments to and repayments by UK government agencies in 2019. All material differences have been reconciled.

Table 1: Detailed Extractive Industries Payments to/refunds from UK Government in 2019 [1]

This table provides an overview of the payments and refunds reported by extractive companies and government agencies in 2019, which provides a net total £1,513.69 million. Most of these transactions cover Ring-Fence Corporation Tax and Supplementary Charge payments to HMRC and licence fee payments to the OGA. A total of £10.55m was reported by out-of-scope and non-participating companies and this is subtracted from the overall total, leaving a total of £1,503.14m reported by government and a total of £1,503.13m reported by UK in-scope companies. The final reconciliation shows an unreconciled difference of £0.01m, which works out at 0.001% of the total, highlighting the transparency of the UK sector.

Payment stream:Petroleum Licence FeesOGA LevyPRTRFCT & SCMainstream CTPayments to TCEPayments to TCEPayments to CESPayments to CESTotal payments
Type of payee:Oil & GasOil & GasOil & GasOil & GasOther Mining & QuarryingOil & GasOther Mining & QuarryingOil & GasOther Mining & QuarryingAll
Recipient:OGAOGAHMRCHMRCHMRCTCETCECESCESAll
Total reported by government agencies65.7225.28-310.101,658.3748.022.5322.041.640.191,513.69
Total reported by government agencies for out-of-scope and non-participating extractive Companies (a)7.602.050.07-2.032.630.000.000.040.1910.55
Total reported by government agencies for in-scope extractive companies58.1223.23-310.171,660.4045.392.5322.041.600.001,503.14
Total reported by in-scope extractive companies58.1223.23-310.171,660.3945.392.5322.041.600.001,503.13
Net unreconciled difference (b)0.000.000.000.010.000.000.000.000.000.01

(a) Includes extractive companies 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. 
(b) All net unreconciled differences are below the materiality deviation agreed by the MSG.

 

Table 2: Extractive Industries Payments to/refunds from UK Government in 2019

This table shows a breakdown of payments and refunds of the data in Table 1 (above) by sector (oil and gas and mining and quarrying) and government agency (OGA, HMRC, TCE and CES) for all the companies that participated in UK EITI for 2019.

Type of payee:Oil & GasOther Mining & QuarryingAllAllAllAllAll
Recipient:AllAllOGAHMRCTCECESAll
Total reported by government agencies1,443.4470.2590.991,396.3024.571.831,513.69
Total reported by government agencies for out-of-scope and nonparticipating extractive companies (a)7.732.829.650.670.000.2310.55
Total reported by government agencies for in-scope extractive companies1,435.7167.4381.341,395.6324.571.601,503.14
Total reported by in-scope extractive companies1,435.7067.4381.341,395.6224.571.601,503.13
Net unreconciled difference (b)0.010.000.000.010.000.000.01

(a) Includes extractive companies 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. 
(b) All net unreconciled differences are below the materiality deviation agreed by the MSG.

Adjustments to the EITI reconciliation scope

Each year the number of companies assessed as in-scope changes as new companies slip above or below the threshold of £86,000 or companies’ merge. In 2019 the reconciliation was adjusted slightly during the reconciliation exercise as more information on the extractive nature and materiality of payments emerged and we believe that we have captured all material financial flows. The changes are detailed as follows:

Table 3: Adjustments to the EITI reconciliation scope

Sector2018 Scope+-2019 Scope
Oil & Gas398-1037
Mining & Quarrying163-217
Total5511-1254

 

Oil & Gas sector

Six companies were added to the reconciliation scope when it was realised that their payments/repayments made to HMRC exceeding £86,000 for the calendar year 2019. One company was added to the reconciliation scope when it was realised that its payments/repayments made to CES exceeding £86,000 for the calendar year 2019. One company decided to participate voluntarily in the EITI reporting process. 

Seven companies that were initially sent reporting templates were subsequently excluded from the reconciliation process because as part of the reconciliation exercise it emerged that they made/received no material payments/repayments during the calendar year 2019. Two companies were acquired by another in-scope company that submitted a combined reporting template. Accordingly, this reduced the number of in-scope companies by two.
One company declined to participate in the reconciliation process.

Mining & Quarrying sector

Three companies were added to the reconciliation scope when it was realised that their payments/repayments made to HMRC exceeding £86,000 for the calendar year 2019. Two companies declined to participate in the reconciliation process. The final number of companies (both oil and gas and mining and quarrying) included in the EITI reconciliation scope was therefore 54.

Data collection

Three potentially in-scope companies chose not to submit returns, one oil & gas company and two mining companies. As the total amount reported by government and extractive companies subject to the reconciliation constitutes more than 99% of the total reported by government agencies, the overall reconciliation outcome is substantial and satisfactory.

Breakdown of Reconciled Data by Company and Sector

The two tables below set out the detailed results of the reconciliation exercise with post-reconciliation differences noted between amounts reported as paid by in-scope extractive companies and amounts reported as received by government agencies.

Table 4: Oil & gas companies

This table lists, in alphabetical order, the oil and gas companies that participated in the 2019 reconciliation process and provides a breakdown of their total payments and receipts against each individual tax and licence regime.

£000As reported by Government AgenciesTotal
reported
by
company
RFCT
& SC
PRTPetroleum
Licence
Fees
OGA
Levy
Payments
to TCE
Payments
to CES
Total
Alpha Petroleum  1,151.54282.42  1,433.951,433.95
Anasuria Hibiscus UK Ltd8,063.66     8,063.668,063.66
Apache
Corporation
171,203.43 1,243.11638.91  173,085.45173,085.45
BHP Billiton 
Petroleum Great Britain Ltd
17,071.02     17,071.0217,070.02
BP UK Group -20,735.704,350.411,414.93 210,64-14,759.72-14,758.72
CalEnergy
Gas Ltd
-348.96     -348.96-348.96
Centrica40,543.68-70,077.774,774.871,846.69395.45 -22,517.09-22,517.31
Chrysaor198,515.621,762.573,476.262,431.28397.90176.33206,759.95206,759.95
CNOOC Petroleum Europe Limited (formerly Nexen Petroleum UK Ltd)274,584.52 4,652.88673.61  279,911.01279,911.03
CNR International UK Investments Ltd16,474.91 304.49724.48  17,503.8817,503.88
Dana Petroleum Ltd-941.49-6,089.16620.30563.75  -5,846.60-5,852.61
ENI UK Ltd129,031.45-3,744.712,407.57355.74910.48 128,960.52128,960.52
EnQuest PLC8,508.55 1,036.571,005.27 86.3810,636.7810,637.78
Equinor UK Ltd  2,335.26447.26  2,782.522,782.52
ExxonMobil
International Ltd
97,695.27-78,693.40    19,001.8719,001.87
Hurricane
Energy Plc
  2,214.78112.04  2,326.812,326.81
IGas Energy
PLC
  1,073.9894.06  1,168.031,168.03
INEOS
Industries
-1,296.83-705.353,545.65288.03129.00215.312,175.812,175.43
Iranian Oil Company (U.K.) Ltd15,568.27     15,568.2715,568.27
Ithaca Energy UK168,586.46-2,591.991,072.34560.72 111.16167,738.70167,739.17
JX Nippon Exploration and Production UK Ltd-7,294.36-2,066.0286.97   -9,273.41-9,273.41
Neptune Energy
(Engie E&P UK
Ltd) 
  2,427.12495.21  2,922.332,922.33
NOBLE ENERGY GROUP -707.06     -707.06-706.64
NSMP
Operations Ltd
     193.42193.42193.42
ONE-Dyas UK Ltd (Formerly Oranje-Nassau Energie Resources Ltd)25,070.10 1,006.77   26,076.8726,076.87
Perenco UK Ltd86,387.17 3,369.332,100.87700.66 92,558.0292,557.98
Premier Oil PLC-349.52 2,404.90676.04  2,731.412,731.41
Repsol Sinopec
Resources UK
Ltd
-52,442.92-9,977.282,198.852,196.27  -58,025.07-58,025.07
RockRose UKCS8 LLC (formerly Marathon Oil UK LLC)28,802.47-12,426.83547.38470.17  17,393.1917,390.92
Royal Dutch Shell PLC-25,421.06-87,905.712,124.232,749.06 220.91-108,232.58-108,230.95
SAGE North Sea Ltd     190.61190.61190.61
SICCAR POINT ENERGY  2,886.1697.42  2,983.582,983.58
SUMMIT Exploration and Production7,435.00     7,435.007,435.00
Suncor Energy UK Ltd206,500.00     206,500.00206,500.00
TAQA Bratani Ltd33,428.56-16,915.31807.72723.40  18,044.3618,044.36
TOTAL Group / Total Holdings UK Limited234,741.49 5,999.872,282.22 189.66243,213.24243,210.54
TULLOW OIL PLC-19,008.52     -19,008.52-19,008.52
Total1,660,401-310,16758,11923,2302,5331,5941,435,7111,435,705

Table 5: Other mining & quarrying companies

This table reports, in alphabetical order, the mining and quarrying companies that participated in the 2019 process and provides a breakdown of their total corporation tax payments and receipts and their total payments made to TCE: there were no payments by these companies to CES.

£000As reported by Government AgenciesTotal reported by company
Mainstream Corporation TaxPayments to TCETotal
Aggregate Industries UK Ltd(a)12,260.78680.1812,940.9612,940.96
Albion Stone183.0690.63273.70273.70
Breedon Group PLC15,094.55248.2315,342.7815,342.98
Brett Group-279.26 -279.26-279.26
Britannia Aggregates Ltd 518.79518.79518.79
Cemex UK Materials Ltd281.615,637.025,918.635,918.63
Cleveland Potash Ltd 830.27830.27830.27
DEME Building Materials Ltd94.091,888.411,982.501,982.50
Hanson UK Group 3,285.853,285.853,279.42
Irish Salt Mining & Exploration Co. Ltd1,927.76 1,927.761,927.76
Llanelli Sand Dredging Ltd 346.85346.85346.85
Saint-Gobain Ltd(b)16,500.00 16,500.0016,500.00
Tarmac Holdings Limited-4,299.395,065.50766.12766.12
The Banks Group2,620.66 2,620.662,620.00
Van Oord UK Ltd668.74460.741,129.481,129.48
Volker Dredging Ltd 2,031.372,031.372,031.37
Westminster Gravels Ltd339.00959.051,298.051,298.55
Total45,39222,04367,43567,428

(a) Including the payments made by Kendall Bros (Portsmouth) Ltd
(b) Including the payments made by Saint-Gobain Construction Products UK Limited

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 summary tables above and, for petroleum licence fees and the OGA Levy, are included in the online disclosure of project level payments and repayments at https://www.ukeiti.org/publication/uk-eiti-payments-report-2019, which also includes reconciled field level data on Petroleum Revenue Tax and some project-level payments to TCE and CES. .

Separate to the UK EITI payment reconciliation exercise and complementing the information in this report, a number of companies have reported their 2019 payments to governments around the world, including to UK government entities, under the EU Accounting and Transparency Directives. There can be differences in the amounts reported under UK EITI and under the EU Accounting and Transparency Directives. These differences can relate to interpretation of the scope of payment categories, reporting currency and timing. The Natural Resource Governance Institute maintains a database of Payments to Governments reports submitted by companies under EU/EEA and equivalent Canadian legislation. [2]

Section 106 (Town and Country Planning Act 1990) Payments

Payments to local planning authorities in England and Wales are required under section 106 of the Town and Country Planning Act 1990 and equivalent legislation in Scotland and Northern Ireland. These are used to mitigate the impact of extractive activities on the local community and benefit local communities. These payments can provide external benefits, including the improvement of local road networks or community facilities.

Only one company reported material payments under section 106 or equivalent legislation. It was Aggregate Industries UK Ltd, who reported total payments for £113,326.

Beneficial Ownership

Further information on the UK’s Beneficial Ownership regime can be found here. Beneficial Ownership data for each year is available in each individual UK EITI report available in the Publications & Reports section of the website.

Approach and Methodology

The UK EITI approach and methodology to reconciliation has evolved over time and is kept under review by the MSG. The approach and methodology to the collection and publication of information on extractive-related payments to the UK government in 2019 is available here.

Revenue Allocations

The UK government publishes full details of its income and expenditure (outturn figures, estimates and forecasts), see for example HM Treasury, Budget 2020. Budget forecasting is overseen by the independent Office for Budget Responsibility (OBR). Government accounts are audited by the National Audit Office (NAO) and scrutinised by the Public Accounts Committee. More information on Revenue Allocations in 2019 is available here.

 

 

Notes and References
  1. Payments for petroleum licence fees and field-level petroleum revenue tax payments and some payments to TCE and CES are included in the online disclosure of project level payments and repayments at (https://www.ukeiti.org/publications-reports
  2. www.resourceprojects.org
    UK-incorporated companies, where a parent company is not reporting in a non-UK jurisdiction, file payments reports online with the Companies House Extractives Service: https://extractives.companieshouse.gov.uk 
    London Stock Exchange Main Market-listed companies (including those that are both UK and non-UK incorporated) announce or file payments reports online with Morningstar, the UK National Storage Mechanism:  http://www.morningstar.co.uk/uk/NSM