North Sea

BP oil platform in the North Sea  © Reuters

After 40 years of production that far exceeded original expectations, the North Sea oil and gas industry is in serious jeopardy. At the beginning of the year, there was a degree of optimism following Sir Ian Wood’s report and the establishment of a new, more interventionist regulator considered capable of driving a further wave of activity. But with the fall in oil prices over the past four months, the mood has changed dramatically. Read more

A cold wind of economic reality is blowing in from the North Sea. The days in which offshore oil and gas production could provide easy revenue to support public spending are over. Development of the area’s remaining reserves will only thrive if the tax regime is completely rewritten, with the tax take drastically reduced. Politicians in London and Edinburgh should accept this reality rather than pretending that we still living in the glory days of the 1980s. Read more

The news of another excellent year for investment in the North Sea will come as a surprise only to those who do not understand the dynamic relationship between economics and technology.

The original predictions were that North Sea oil and gas – certainly in the UK sector – would be exhausted by 1990. A strict depletion policy in Norway might keep production running for a few more years. That was the received wisdom of the 1970s.

Now, 56 years after the first gas was produced at the West Sole field, the prospect for the whole province is for at least two more decades of production. Total output is down but there is a long tail. Resources which were once thought inaccessible are now being brought onstream thanks to advances in drilling and reservoir management technology. Read more