Britain's Offshore Oil and Gas Index

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BRITAIN'S OFFSHORE OIL & GAS Organising Offshore Development In 1964, Britain enacted the Continental Shelf Act to extend sovereignty offshore, drew up the Petroleum Production Regulations to provide a system for licensing and control and issued the first round Licences. For licensing purpose, the United Kingdom continental shelf is dived into quadrants, the areas of one degree latitude by one degree longitude. Each quadrant is further divided into thirty blocks of approximately 250 square km. Companies are invited to apply for the right to explore blocks selected by the Department of Trade and Industry in licensing rounds held every two years. Licences are awarded to British registered companies judged to have good operational records, well-prepared exploration and environmental plans, and financial soundness. The offshore petroleum industry has generated huge tax revenues and created many jobs in industries which supply services and equipment. Total capital investment in exploring and developing the North Sea has reached some £190 billion. Government tax revenues over the same period are some £170 billion. Of the total price of a barrel of oil, 71% pays for production costs (exploration, development and operating), some 16% goes to tax, leaving 13% for the producer. The operating companies have formed the Oil & Gas UK to provide a forum to deal with common interests and problems, and to represent the operators to the Government and other interested groups.