UK government must take control of oil and gas production
on
UK government must take control of oil and gas production
UK oil and gas production has been steadily declining since 1999. The reason is that the UK government, unlike those of most other countries, has abandoned oil and gas production to the private sector and has failed to create attractive conditions for private companies to invest more. The government should follow the example of Norway and many other countries by setting up a Hydrocarbons Authority which would initiate new private-public partnerships to engage in offshore oil and gas production. This would generate many billions of £s in highly-needed revenues.
(A short version of this article can be found here.)
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| Article Highlights: |
| - Apart from the United States, the UK is the only country in the world in which the government does not oversee the exploitation of the nation’s oil and gas resources. - The problem with this is that the investment decisions of private companies are based on their own interests rather than the national interest for the UK to maximise production of its resources. - With its high production costs, the UKCS is relatively unattractive to these private companies. This results in a severe underproduction of British oil and gas resources. - To remedy the situation, the UK should follow the example of countries such as Norway and the Netherlands and set up public-private partnerships (PPPs) under which the government has the means to maximise production of its domestic hydrocarbon resources. |
Apart from the United States, with its close to 100% degree of private enterprise in the hydrocarbons sector of the country’s economy, and a few other exceptions, it is the governments in the world which determine if, how and when there can be exploitation of the nations’ oil and gas.
The one other significant exception to this near-universal phenomenon is the United Kingdom which has so behaved over more than 25 years from the time of the Thatcher regime. This development followed two decades when a succession of Labour governments partially nationalised oil and gas exploitation of the UK’s offshore continental shelf. In contrast to this socialist endeavour in the mid-1960s and much of the 1970s, an earlier 1960s Conservative government had completely given over oil and gas exploitation to the private sector, offering no less than 359 blocks for potential licences under the terms of the 1964 Continental Shelf Act. No fewer than 23 oil companies offered £100 to 200 million for offshore oil and gas exploration. It was the emphatically British Petroleum Company Ltd ¬– with its 48.6% government shareholding (albeit with the government doing nothing more than nominate its two chosen members to join the company’s board and take its share of the annual profits) – which led the way to securing access to the potentially most promising licences. It was closely followed into securing licences by Royal Dutch Shell’s British component – working along with Esso’s UK-based company. The Conservative government saw this policy as little more than a means of securing a cashflow from the profits which would be – and most certainly were – declared.
By this time, however, the Labour Party had been elected to office in 1964 and expressed a serious immediate need to change the nature of the UK’s energy economy which, hitherto, had been predominantly coal-orientated. Indeed, by 1965 – as demonstrated by my Fabian Pamphlet, ‘Oil: the New Commanding Height’ – the Party had come to recognise the need for a major and deep study of the implications which lay behind the prospective hydrocarbon riches waiting to be secured from under the North Sea.
Unfortunately, however, in 1966 after two years in office, Harold Wilson, the Prime Minister, selected Richard Marsh to take over the post of the Minister of Power. Marsh was highly reluctant to change the previous Conservative government’s attitudes to, and decisions on, the North Sea’s exploitation, given the powers of persuasion by the oil companies to maintain the status quo. In spite of Wilson’s resignation in March 1968, the Labour government remained in office until 1970, with a succession of two other Ministers of Power with little apparent interest in re-structuring North Sea developments. Thus, the entities most involved in the North Sea’s hydrocarbon development remained largely as they had been under Conservative rule — except for the ministerial decisions to permit the nation’s Gas Council and the National Coal Board to secure shares in a number of the production licences which had already been granted by the former Conservative government. The return to Conservative rule in 1970 accepted this situation in which the state entities (the British Gas Council and the National Coal Board) were allowed to maintain and even expand their offshore gas interests.
Politics, however, again brought the return of the Labour party to power in 1974. This government’s term of office through a five year period to 1979 produced a massive change in North Sea developments, with repeated new discoveries of both oil and natural gas. These developments led to actions whereby the hitherto only very modest involvement of the government was replaced by the state’s intervention on a large and extensive scale. Most notable of all was the government’s resuscitation of the Labour Party’s 1968 proposal for the establishment of a National Hydrocarbons Corporation, whereby the financial needs of the country’s 1974 low quality of economic and social conditions could be met.
The UK's offshore oil and gas policies from 1974 - 1979
Action by the Labour government over this short period reflected the party’s election manifesto, namely that the government ‘would be determined to ensure not only that the North Sea and Celtic Sea’s oil and gas reserves would be in full public ownership, but also that the operations involved in finding, producing and distributing them would be under full Government control through majority public participation’.
Thus, the government’s fundamental review of Continental Shelf policy led to ‘government take and participate, corporation tax changes; and measures to help Scotland and other development areas’. This declared range of state interventions was implemented in part in the context of the rapid rate of increase in both gas and oil production and of prices which escalated from $2 per barrel in 1973 to $25 in 1979.
Given these conditions, the Secretary of State for Energy in 1974, Eric Varley, commented as follows. ‘If the current price of oil continues and with the high production now expected, profits on our offshore oil will be enormous... Under present arrangements, tax and royalty would take a relatively small proportion of profits ... so that North Sea Licencees could reap enormous and uncovenanted profits on their investment. A half or more of the post-tax profits are likely to be remitted overseas so that by 1980 the cost of such remittances on our balance of payments could reach, or even exceed £1,000 million annually’ (Dept of Energy, UK Offshore Oil and Gas Policy, HMSO, July 1974, p.4).
The government thus considered that ‘an intolerable situation would arise’. Two objectives were set out to ensure that the natural resources would be to the benefit of the nation and secure big increases in government revenue from the exploitation of the Continental Shelf, whilst the oil companies secured a suitable return on their capital investment. ‘Public control’, the government argued ‘will safeguard the national investment’.
Thus, the government concluded, it should take actions under five heads:
- First, to take an additional tax on the companies’ profits ... by closing loopholes in the present existing taxation rates.
- Second, to require a condition of future licencees which would enable the government, if it so wished, to grant majority participation to the State in all future fields discovered.
- Third, to ensure that majority State participation in the existing licences secures fully justifiable benefits from North Sea oil and gas given that the state contributes its share of past and present costs, as, indeed, already partly adopted through public sector participation through the NCB and British Gas Council.
- Fourth, to establish a British National Oil Corporation which will represent the government and play an active role in the future development, exploration and exploitation of the UK Continental Shelf; and would have powers to extend its activities to the refining and distribution of oil.
- Fifth, to extend government powers to control oil and gas production and also to take power to control the level of output in the national interest and to develop an offshore pipelines system.
In addition, the government intended to secure changes to the system of collecting corporation taxes, and to the handling of the declaration of oil companies’ financial losses. Indeed it wanted to ‘ring fence’ the North Sea so that losses made elsewhere in the world by companies which were involved in the North Sea would not be able to use those losses to reduce their North Sea profits.
In conclusion, the government’s White Paper (HMSO, cmnd.54696,11 July 1974) was comprehensive and far-reaching and designed ‘to ensure that the nation gets full benefit from the newly-discovered wealth’. Confidence was expressed for the new structure bringing substantial benefits to the whole country and, in particular, to the regions in need of development’.
The degree of the government's actions by 1979
Unhappily, the government’s attempts to bring the management of the UK’s vast resources under control, to ensure that the British National Oil Corporation (BNOC) was able to enhance its importance alongside the private sector oil companies and to secure much expanded revenues from the operations of the private companies, did not succeed. Indeed, there turned out to be severe limitations on the government’s ability to control already existing UK’s offshore oil and gas activities.
Natural gas output from 1974-79 increased by only 10% - from 30.6 to 34.2 million tons oil equivalent (Mtoe). This reflected the “hostility” between the private sector producing companies and the state-owned British Gas Council. At the other extreme, oil production rose from near zero in 1974 to 77.9 million tons in 1979,as the consortia of international oil companies romped ahead on the exploitation of the giant fields which had already been declared commercial prior to 1974 (in 1971,1972, and 1973) and which achieved production start-up in 1974,1975,1976,1977 and 1978. These mainly foreign producing companies moved rapidly ahead as oil prices held steady – or even moved up throughout 1978 and then leapt ahead to secure more than double the price by 1980.
But the government turned out to be unable to profit from this development, essentially because the concessions for exploration and exploitation had already been granted. It seemed that the point had been reached at which little or nothing could be done by the government to constrain the private-enterprise forces from the bonanza they had secured and from which they could not be divorced. Thus, in spite of the state entities involved between 1974 and 1979, viz. British Gas, the National Coal Board and BNOC, there was an essentially negative government approach to the expansion of oil and even more negative, to the relative near stagnation of natural gas production. In the by-now designated Department of Energy, there was an aura of lethargy vis-à-vis the Labour Party’s radical 1974 policy. Likewise, the Treasury refused to separate out the rapidly increasing flow of oil and gas-created revenues from the total tax-take, in spite of the 1974’s White Paper intention that the exploitation of North Sea oil and gas resources should bring ‘maximum benefit to be conferred on the community and particularly in Scotland and on regions elsewhere in need of development’ so that ‘the nation got full benefit from the newly-discovered wealth’ The failure by the UK of this intent to secure control of oil and gas production and of their uses contrasts starkly with the Dutch and Norwegian governments’ decisions on how to develop supplies and to secure the high shares of their oil and gas revenues.
The Labour government’s Parliamentary defeat in February 1979 not only put on hold any further attempts to secure the party’s 1974 declaration of fundamental elements from the country’s offshore oil and gas prospects - as had been achieved by Norway’s approach to the exploitation of its resources – but it also stymied alternative processes which had been advocated. As the special advisor to Tony Benn, the Secretary of State for Energy from 1977 to the day of the government’s defeat in 1979, I had produced a report entitled, ‘The Exploitation of Britain’s Offshore Resources’, in which the defects and drawbacks of governmental policy were analysed. (British Oil Policy: a Radical Alternative, Kogan Page, London, 1980).
My Report detailed the results of the traditional concession system and concluded that there had been an essentially indifferent government approach to the prospective continuing exploitation potential of both oil and gas; and also to associated issues of pricing and state revenues from the existing taxation system. From this situation I set out alternatives for the exploitation of the rest of the UK’s oil and gas resources. Needless to say no action was initiated from this Report given the change of government. The new Conservative Secretary of State for Energy, chose in July 1979 merely to place a copy in the Library of the Houses of Parliament. It thus became no more than a shadowy public document with Crown Copyright.
The Thatcher years and after
Prime Minister Thatcher declined to sustain very little of the socialists’ plans introduced in the mid 1970s for the enhanced exploitation of the oil and gas resources of the UKCS (UK Continental Shelf). Instead, the Conservative government’s view was that the optimal utility of resources lay with competitive forces in free markets. Thus, the 1982 Oil and Gas Act hived off BNOC’s offshore interests, while the 1985 Oil and Pipelines Act abolished the state corporation altogether.
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| Former UK Prime Minister Margaret Thatcher |
The ‘success’ for the Thatcher regime lasted only a short period however, unitl 1985. From 1986 government revenues from oil and gas production declined dramatically from £8000 million to a low of less than £1,000 million in 1991/2. In the early 1990s the government of the new Conservative prime minister – John Major – seemed likely to be able to take advantage from the then well-established and expanded privately-owned and successful offshore industry. Annual production now rose from 91.3 to a peak of 130 million tons of oil in 1995; and from 40 to 80 million tons oil equivalent of natural gas. But, as a result of the government’s modest demands for tax-takes in the context of declining international oil prices (from $24 per barrel in 1990 to $16 in 1994), government revenues failed to get higher than £1,500 million. Perhaps members of Major’s Conservative administration and from its majority of MPs had ‘too many irons’ in the oil industry’s fire? Producing companies’ profits were, by way of contrast, much enhanced!
The return to a Labour government, 1997
Previous Labour governments had, as shown above, sought to ensure that state intervention in the UK’s offshore hydrocarbons exploitation was of the essence for the country’s well-being. With regard, however, to these ‘socialist’ endeavours, neither Prime Minister Blair, nor the Chancellor of the Exchequer, Gordon Brown (subsequently Prime Minister after Blair’s resignation) have chosen to recognize the validity of state intervention for maximizing state benefits from offshore oil and gas production.
Their energy sector Ministers – for many years never achieving Secretary of State status – have not undertaken much more than a preservation of the status quo as established by Mrs. Thatcher and John Major. In essence, hands off the input of any public-sector funding in the North Sea’s exploitation has been the case over the past 10+ years. On the contrary, the policy has been to leave all the investments required to private enterprise: from which, it was argued the state would be able to secure some taxation from the profits of the upstream oil and gas production companies: but with the inflow of some such taxes not being devoted in any way to sustaining, let alone expanding, the level of offshore oil and gas activities. In other words, the government’s inflow of taxes was not to be devoted in any way to sustaining, let alone expanding, the continuity and level of offshore oil and gas activities anywhere on the UK’s continental shelf.
As already indicated above, pre-1997 petroleum revenue taxes were inherently modest: and since that year of the fundamental change in the country’s politics, revenues from offshore oil have so remained. They even fell to under £1000 million in 1997/8, 1998/9, 1999/2000 and 2002/3. Subsequently, despite rising oil and gas prices over the last 13 years the average annual take has been no more than £1,100 million (but excluding the exceptional year in 2008 when oil was priced up to $150 per barrel and so led to the generation of £2,500 million petroleum revenue taxes during that year).
Overall, the government has cared little for the adversely high prices of energy and has also utilized any higher-than-expected flows of taxes from the upstream oil and gas activities in other economic and social sectors. Depressingly, it has allowed such an attitude in the context of a decreasing interest by private sector oil and gas companies, in spite of the fact that the a minimum of 25 billion barrels of oil equivalent has yet to be produced, according to official government figures. In 2009 little more than 1000 million barrels of oil equivalent were produced: compared with some 1600 million barrels in the first full year of New Labour’s regime. A decline that is, of 37.5% of the country’s hydrocarbons production over the last decade.
As a result the recognition of the UK as a significant hydrocarbon rich country is now fading fast (perhaps even faster than the demise of the country’s coal industry). From its highest 4.15% contribution to global oil and gas production in 1989, it has now fallen – in 2009 – to under 2%; with oil consumption now exceeding the UK’s production by over 7 million tons. The country’s additional import costs of the latter have thus exceeded the use of indigenous oil by approximately 50 million barrels which, at an imported price of about £50 per barrel, has generated additional import costs of about £2,500 million.
This clearly adverse development needs to be challenged by the reinstatement of governmental intervention through which larger volumes of oil and gas can be produced from the remaining significant resources of the UK continental shelf, much of which remains unexamined; and also from the exploration of deeper hydrocarbons which could be highly significant.
As set out below, this is capable of being done by newly revised institutional arrangements involving joint ventures between the government and private oil companies. Both parties can benefit from the discovery and exploitation of the estimated remaining multi-billion resources of oil and natural gas.
Can the state generate public/private partnerships to secure the exploitation of the UKCS' remaining hydrocarbons?
The most recent governmental Energy Review Consultation Document, The Energy Challenge, claimed that government policies had helped the UK to make the most of its indigenous resources of oil and gas. This assertion, however, is contradicted by the dramatic fall in the UK’s oil production since 1999 at a rate unparalleled in the global upstream industry – except for production declines caused by political and/or military actions (eg. the Biafra war in Nigeria in 1979, the 1991 counter-revolution in the USSR and the 2003 invasion of Iraq). UK oil production has now fallen to just over 50 percent of its 1999 level, not because reserves and resources are running out, but as the result of unsatisfactory conditions for their discovery and exploitation and by virtue of government policies which do not stimulate production. For the same reasons, natural gas output has also fallen sharply – by over 36 percent since 2000.
Even if the government’s hopes for ‘a sustained development for a better future on the UKCS’ prove to be achievable under the present set-up for the exploration and exploitation of the country’s reserves and resources, then little more than 40 percent (1.65 million b/d oil equivalent) of the UK’s hydrocarbons’ demand in 2020 could be met from indigenous production. Imports of some 2.5 million b/d oil equivalent even at an average price of £50 per barrel would create a charge on the balance of trade of some of 46,000 million (in 2009 £s) per year.
But ‘sustained investment’ in the UKCS, with its much higher finding costs compared with those in the Dutch and Norwegian offshore areas and somewhat higher average development costs, is likely to be undermined by its relative unattractiveness to private enterprise. Moreover, recent increases in the severity of the UK taxes on most of the oil and gas producing companies have further exacerbated disincentives for companies to invest in UKCS upstream activities. This relative unattractiveness of the UKCS for the major upstream oil and gas companies – whose investment decisions are generally rank-ordered internationally – has been mitigated over the past two to three years by the off-setting impact of the very high prices of oil and gas. But these companies’ long-term investment decisions are generally taken in the expectation of lower real prices (of the order of $60 per barrel oil equivalent in 2009 $s). A return to this lower level of energy prices would make the UKCS a lowly-ranked contender for exploration and development investments.
In this context the fact that the government has only been able to claim one “success” since 2003 in the UK’s role as a globally-significant hydrocarbons producer, gives the false impression that the potential for indigenous oil and gas production is severely limited in the UK. And this one “success” was, in fact, a very modest one, namely a claim that there had been ‘more interest in the 2005 and 2006 licensing rounds for North Sea oil and gas exploration than in any other round since 1964’. This, however, is of relatively little importance. Licence purchases are not costly and do not inevitably lead to high levels of investment in exploration activities, let alone to new field developments. It is worthy of note that only 44 percent of the 54 ‘promote’ licences (which give the licensee the opportunity to assess and promote the potential of the licensed acreage) issued in 2003 had by the end of 2005, ‘secured financing to press on with actual exploration. Since then annual investments from 2006 have not increased at all and are now expected to fall as exploration drilling activity slows down.
These adverse developments and the limiting prospects for the UK’s hydrocarbons’ production could, however, be reversed by a fundamental reshaping of the structure of the country’s offshore oil and gas industry whereby the declared objective of maximising the UK’s oil and gas resources could be achieved. But this necessitates strong incentives to enhance production from the 11 to 12 billion barrels of oil equivalent which the Department of Energy estimates remain to be produced over the medium term from already discovered oil and gas fields. In addition, there are other prospects, in other already mapped areas of the UKCS in which more than 10 billion barrels of oil and gas equivalent could be found. Concurrently much expanded exploration efforts across all of the UKCS could access potentially additional large volumes of oil and gas. Given these prospects hydrocarbon production could be maintained upwards from the current 2.5 to 3.0 million barrels per day of oil equivalent.
In order to achieve the objectives set out above, the present exclusively private sector upstream oil and gas industry is inadequate. The UK necessarily has to compete with much of the rest of the world in order to secure an adequate continuing flow of capital for offshore exploration and exploitation by all the companies which operate internationally. In taking decisions on where to invest, such companies seek a minimum pre-tax rate of return of at least 20 percent. In this context, high finding and development costs, as well as corporate taxation at 50 percent of the profits earned, is hardly likely to provide much by way of incentive for new exploration ventures. Thus, in a booming prospective investment climate post-2010 for the international oil and gas upstream offshore industry around much of the world excluding Europe, there can only be low expectations of the UKCS’ ability to attract great or enhanced interest in the opportunities it offers for new oil and gas developments. The apparently successful take-up of new licences offered by the government in recent years must, instead, be interpreted as actions by a set of companies anxious to establish fall-back positions, should they not be able to secure adequate acreage for exploration elsewhere in the world; and/or in the event of oil and gas prices moving up towards $100 or more per barrel oil equivalent.
Almost all oil and/or gas-rich countries in the world (outside North America) have already recognised that their successes in the search for on-going indigenous hydrocarbons exploration and exploitation activities necessitate public/private partnerships (PPPs). Only in this way can adequate levels of investments be jointly achieved, with the governments of the countries themselves satisfied by an acceptable 5-10 percent rate of return on their investments. Such relatively modest public sector rates of return on oil and gas exploitation serve to ensure that the oil and gas fields produced by joint public/private ventures can be more intensively and extensively developed, thus generating more oil and/or more gas production potential sooner than would be the case with a private company-only project. At the same time, the participating companies’ rates of return on such joint ventures in hydrocarbon developments can be enhanced to an acceptable level, with no royalties or tax complications which might otherwise undermine the companies’ returns on their investments. The outcome is a win/win situation for both parties.
The introduction of PPPs ought now to become the basis on which the very-much needed further exploitation of the UKCS can be achieved. This involves ending the current system which relies on intermittent allocations of concessions on which the successful companies can more or less proceed at the speed they choose. They do so only as and when investment funds become available to the company and when there are no alternative investments opportunities open to them.
The government needs to establish a state entity, viz. a Strategic Offshore Hydrocarbons Authority — akin to Norway’s PETORO — with the responsibility for creating continually available opportunities for exploration for hydrocarbons across the whole of the UKCS (except, of course, for blocks already licensed). From these opportunities, oil and gas companies could at any time select areas they wish to explore, based on their knowledge of the hydrocarbons potential. The Strategic Authority, in turn, would be required at all times to consider such requests by any reputable company in order to determine, as a matter of urgency, the conditions and terms on which exploration could take place.
Once a company’s initial exploratory work confirms the existence of an oil and/or a gas field with production potential, then a PPP can be negotiated between it and the Strategic Offshore Hydrocarbons’ Authority. Negotiations need not be protracted, once the two essential and intimately related elements of the PPP have been agreed:
First, determination of the maximum possible production potential of the field(s) within the knowledge that the modest rate of return on state investments will enhance the field’s ultimate percentage of recoverable oil and/or gas, and also help determine the associated optimal production curve.
Second, the establishment of the parameters which determine the shape of the rising cost-curve for increasing recovery and the anticipated rate of depletion. These data will indicate the proportions of the required investments from the private and public interests respectively. In these calculations the latter’s share increases pro rata with the inevitably rising unit costs associated with higher recovery and production rates. Such technico-economic considerations create a basis for both the scale and the timing of the investment requirements, with the objective of determining a best-for-both parties’ division of the production of oil and/or gas over the life of the field.
In the context of these radical procedures to boost a field’s volume of recoverable reserves and for determining the shape of the production curve, it is important to be aware of the following considerations.
- The involvement of the state should not generate any material disadvantages for the company/companies involved in such PPPs. Quite the contrary, the companies involved are more likely to secure an enhanced return on their own reduced levels of investments in the enterprise. This is because it is the state’s input of low-cost investments (with a 5-10 percent opportunity cost of capital) which generates both accelerated and enhanced production of the original oil and/or gas in place, compared with the results which would have arisen from decisions made exclusively by the company, given its requirements for a minimum 20 percent rate of return on its investments.
- The involvement of the state in the development of new fields should probably be financial only, as the operating company could be given a first-refusal opportunity to buy the state’s share of the production at, say, a negotiated discount of 5-10 per cent from market values as the mechanism whereby the company’s initial costs of finding the field(s) can be offset. These guaranteed cash flows to the Strategic Offshore Hydrocarbons Authority will service the investments which it made on behalf of the nation.
- The public/private partnership for an intensified exploitation of the UKCS should eliminate the need for the special tax regimes which have hitherto been imposed on upstream oil and gas activities. Participating companies would have no more than the obligations of the UK’s general corporate tax regime.
- The pro-active involvement by the state in upstream oil and gas developments will be highly positive for the UK’s economy in several ways. First, revenue will be generated from the sale by the Strategic Offshore Authority of the oil and/or gas under the PPP, which will be welcomed by the State as well as by the general public. Second, British companies will have enhanced opportunities to supply equipment, goods and services to the offshore oil and gas industry. Third, the reversal of the present decline in oil and gas contribution will have a positive effect on the country’s balance of ¬trade. Fourth, the new policy will help the UK to secure ‘affordable (and secure) energy for the long term’, so fulfilling an important part of the ‘Energy Challenge’ to which the government draws our attention; but which it has rarely and barely sought to address. Active state policies can and should engender its management of the country’s remaining oil and gas reserves in effective cooperation with appropriate international and national oil and gas companies.
BIBLIOGRAPHY
Author’s Relevant Background Publications
Oil: the New Commanding Height, Fabian Research Services, London, No. 251, 1965.
Impact of Offshore Oil Operations, The Institute of Petroleum, London, 1974.
The North Sea Oil Province: Simulation of its Development and Exploitation 1969-2029. Kogan Page, London, 1975.
The Economic Background to North Sea Oil and Gas Development, IPC Science and Technology Press, Guildford, 1975.
Optimal Development of the North Sea’s Oilfields: a Study in Divergent Government and Company Interests and their Reconciliation, Kogan Page, London, 1976.
British Oil Policy: a Radical Alternative, Kogan Page, London, 1980.
North Sea Oil Depletion Policy, House of Commons Select Committee on Energy, HMSO, London, 1982.
North Sea Oil and Gas: the Exploitation of Britain’s Resources: Retrospect and Prospect, Imperial College Press, London, 1996.
The UK Gas Industry and the Liberalisation of European Markets, House of Commons Trade and Industry’s Committee Report, HMSO, London, 2002.
Public/Private Partnerships and the UKCS, Oxford Energy Forum, 2006.
Other Authors’ Relevant Publications
M.P. Devereaux and C.N. Morris, North Sea Oil Taxation, Institute for Fiscal Studies, London, 1983.
D.I. MacKay and G.A. Mackay, The Political Economy of North Sea Oil, Martin Robertson, London, 1975.
M. Posner, Fuel Policy: a Study in Applied Economics. MacMillan Press, London, 1973.
C. Robinson and J. Morgan, North Sea Oil in the Future: Economic Analysis and Government Policy, MacMillan Press, London, 1978.
I. Routledge and P. Wright, The Windfall Tax that Got Away? Profitability and Taxation in the North Sea Oil and Gas Industry, University of Sheffield, Energy Studies Paper No 1, 1997.
M. Stoppard, The Resurgence of UK Gas Production, Oxford Institute for Energy Studies, 1994.
D. Upton, Waves of Fortune, the UK Offshore Oil and Gas Industries, J. Wiley and Sons Ltd, Chichester, 1996.
P. Wright, Gas Prices in the UK; Markets and Insecurity of Supply, Oxford University Press, Oxford, 2006.
Other Useful Papers and Pamphlets
What Price North Sea Gas, Institute of Economic Affairs, London, 1967.
A National Hydrocarbons Corporation, The Labour Party, London, 1978.
Production and Reserves of Oil and Gas in the United Kingdom, Department of Energy Report, HMSO, London, 1974.
United Kingdom Offshore Oil and Gas Policy, Department of Energy Report, HMSO, London, 1974.
Oil Taxation Act 1975, Chapter 22, H.M.S.O., London, 1975
Pipelines and Submarine Pipelines Act, 1975, Chapter 74, H.M.S.O., London, 1975.
The North Sea Achievements of British Industry, Shell UK Ltd, London, 1981
The Petroleum Resources of the North Sea, Energy Information Administration, Washington DC, 1983.
The Story of Britain’s North Sea Oil and Gas, Shell UK Ltd, London, 1983.
Development of the Oil and Gas Resources of the United Kingdom, Department of Energy Annually/ D.T.I, London, 1975-1997,.
The Oil and Gas (Enterprise) Act 1982, H.M.S.O., London, 1982.
U.K. Oil and Gas – Old Hat or New Opportunity, M.Tholen, Economic and Commercial Director, Oil and Gas U.K. Ltd., London, 20
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Who is Peter Odell?
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This article is a draft version of a chapter from Peter Odell’s new book, Upstream, to be published later this year. Peter Odell (born 1930) is a well-known energy economist and Professor Emeritus, Erasmus University, Rotterdam. He is the author of many books, including the famous “Oil and World Power”, “the Future of Oil” (with Kenneth Rosing) and most recently, “Why Carbon Fuels Will Dominate the 21st Century’s Global Energy Economy”. He worked for Shell from 1958 to 1961. In 1963 he wrote a paper for the Fabian Society entitled, ‘Oil: The New Commanding Height’. He later advised the Labour government’s secretary of state for energy, Tony Benn. He is a member of the editorial board of European Energy Review.
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