British North Sea Oilfields: Costs, Tax System and Rates of Return
In 1976 the North Sea accounted for more than 6 per cent of all fixed investment in the United Kingdom. According to estimates discussed in detail below, about £1500 million was spent on the construction and installation of production platforms, the manufacture of associated equipment, pipelines and terminals and on development drilling, compared with total Gross Domestic Fixed Capital Formation of about £23,000 million.1 If all the potentially commercial fields described in Chapter 3 are eventually developed, investment could remain at or above these levels until the early 1980s. During that period the costs of operating the North Sea installations could rise to well over £500 million per annum. Such investments in one industry probably have no precedent in modern times in this country — perhaps only the great rail construction boom of the last century can provide a similar example of such large-scale enterprise. Then, however, the necessary finance was raised in this country: now well over half the money has come from abroad.
KeywordsPetroleum Transportation Income Drilling Expense
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