The Historical Background

The development of North Sea oil and gas over the last two decades has, in many respects, been highly successful. Oil companies have overcome many technical problems of deep sea drilling which had never before been confronted. The first offshore drilling took place in Dutch coastal waters in 1961 and following the passing of the 1964 Continental Shelf Act, the first gas in the British sector was discovered in the West Sole Field in 1965. This was followed by further discoveries in 1966 of gas in the Leman Bank, Indefatigable and Hewett Fields. These and further significant discoveries (enough to support a ‘plateau’ output of around 4000 million cubic feet per day throughout the 1970s and 1980s)1 led to the conversion of domestic consumers to natural gas. Between 1970 and 1978 UK consumption of natural gas increased from 4400 million therms to 16 500 million therms2 each year. As exploration drilling moved further northward, towards the end of the 1960s important oil reserves were discovered. In 1971 BP’s Forties Field was declared commercial, as were Auk, Brent and Argyll in 1972; Argyll and Forties commenced production in 1975. At a time of rapidly increasing world oil prices in the first half of the 1970s discovery rates peaked and by 1980 total (proven, probable and possible) recoverable reserves on the UKCS were estimated to be between 2200 and 4400 million tonnes.3