NORTH SEA OIL AND GAS: THE EXPLOITATION OF THE OIL AND GAS RESOURCES OF THE NORTH SEA: RETROSPECT AND PROSPECT

The size and longevity of Britain's offshore hydrocarbons resources have been under-estimated. Gas reserves were seriously under-exploited for almost 20 years from the late '60s, given a belief that gas should be used only as a premium fuel and in the context of an uncompetitive market. Oil reserves' development and production has suffered from time to time from inappropriate politico–economic conditions. Nevertheless, offshore oil and gas has come to dominate the UK's energy production over the past 20 years and currently accounts for 85% of the country's total energy output.

Fears for resources' exhaustion remain unjustified, as the industry continues to replace oil and gas reserves used each year. The North Sea is still not comprehensively explored: the continuation of the process will enable oil production to remain at high levels and that of gas to expand further. Supplementary output from the new west of Shetland province will become progressively more important after 2000. But continued intensive production overall depends on the maintenance of attractive politico–economic conditions and on present oil prices. It also requires the European gas market to remain firm but, ironically, the planned flow of UK gas to the mainland constitutes a threat to this condition.