Development and production prospects for UK oil and gas post-Gulf crisis. A financial simulation

The operating environment within which North Sea oil and gas exploitation is taking place is both uncertain and subject to continuous change. Some of the major influences, such as oil price movements, are exogenous, being determined essentially by factors outwith the province. Others, such as the implementation of the recommendations of the Cullen Report¹ on safety issues, have arisen from factors within the province. In an extractive industry with production subject both to natural and inevitable depletion, and to repletion through the development of new discoveries, there is an inherent dynamic whose overall consequences are not immediately obvious.