Economic Report 2000 Index

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Meeting the Challenge New Entrants One of the significant features of the UKCS upstream industry is the attraction it has sustained for the independent oil and gas sector. Recent studies have confirmed that the UKCS has twice as many participants (currently 58) as in Norway, Angola or deep water Gulf of Mexico. The independent companies play a vital role in ensuring that activity levels are optimised by building and exploiting niche positions such as in the management of mature fields and targeted exploration. Globally the competition to attract new entrants is intensifying, and a recent study commissioned by the Norwegian authorities has recognised the need to catch up and make their regime more attractive for new participants. The UK authorities need to remain vigilant in ensuring that the UKCS remains attractive for new entrants by maintaining fiscal stability and avoiding unnecessary regulation. Figure 23 illustrates the dynamics of the sector which have been characterised by a considerable turnover of participants. Over the last decade the number of participants has increased by 12, despite various takeovers and withdrawals. The liquidity of the UKCS asset trading market highlights the ease with which participants choose to enter or leave depending on the competitive standing of the UKCS. Figure 23 - UKCS Remains attractive for new entrants