Exxon Corporation - Page 15




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          PRT, and for payments of tax that should have been paid by                  
          foreign contractors providing services to the taxpayer in the               
          North Sea.                                                                  
               Under PRT, operating losses from any period are carried back           
          or carried forward without limit to income associated with the              
          field.                                                                      
               Additional prominent features of PRT, as originally enacted            
          and as amended over the years, may be described generally as                
          follows:                                                                    

               (1)  As an incentive to development of marginal North                  
               Sea fields, an “oil allowance” or exemption from PRT is                
               allowed for each field in an amount equivalent to the                  
               value of 500,000 metric tons of oil per 6-month period                 
               up to a total of 10 million metric tons over the life                  
               of the field;4                                                         
               (2)  A tariff receipts allowance is allowed, which for each            
               6-month chargeable period exempts from PRT tariff receipts             
               attributable to transportation of up to 250,000 metric tons            
               (i.e., up to 1,875,000 barrels) of oil from each field);               
               (3)  Various nonfield-specific expenses are deductible                 
               against income from a field (e.g., exploration,                        
               appraisal, and research expenses);                                     
               (4)  As a limit on the amount of PRT that would be                     
               owed, a “safeguard” provision limits the amount of PRT                 
               payable in each 6-month period in which it applies                     
               except to the extent that adjusted profits from a field                
               exceed 15 percent of accumulated capital investment in                 
               a field and then PRT only applies to 80 percent of such                
               adjusted profits;                                                      



          4    Over the life of each field, the oil allowance or exemption            
          varied from 75 to 35 million barrels of crude oil.                          





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Last modified: May 25, 2011