Exxon Corporation - Page 29




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          systems to issue licenses for the right to exploit petroleum                
          resources.                                                                  
               In considering North Sea licenses Exxon received and under             
          which it operated in the North Sea, respondent’s experts fail to            
          recognize and to give proper weight to the significant                      
          uncertainties, risks, and investment commitments associated with            
          oil and gas exploration and production in the North Sea that, at            
          the time the licenses were issued to Exxon, were associated with            
          the licenses -- risks that insufficient oil and gas deposits in             
          the North Sea would be found, that petroleum resources that might           
          be discovered would not be commercially recoverable, and that the           
          large investments required to explore for oil and gas and to                
          operate in the North Sea would be lost.                                     
               Respondent’s experts speculate that in light of increased              
          oil prices in the late 1970's and early 1980's, the United                  
          Kingdom could have set the license fees higher and obtained                 
          higher revenues under the North Sea licenses.  That, however, is            
          not the proper inquiry.  We are not particularly concerned with             
          speculation, about whether in retrospect the United Kingdom                 
          extracted all the revenues it could have from oil companies under           
          the licenses.  Rather, as Exxon’s witnesses emphasize, the proper           
          focus is whether PRT was imposed and paid “in exchange for” North           
          Sea license rights.  This is the focus of the regulations under             
          section 901 and that focus is to be maintained here.  See                   






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