This article has been prepared mainly by L. P. Tempest of the Bank's Economic Intelligence Department.
The development of North Sea gas and later oil resources has had a very significant impact on the UK economy over recent years. Whereas the capital investment programme in the gas fields in the southern part of the North Sea is now more or less complete, the investment required to develop the oil and associated gas from the more northern fields continues to be very heavy. Cumulatively it is expected to have quadrupled in volume terms over the five-year period 1975 to 1980. The massive demand for finance, which has emerged as a result, has been met by the oil industry and the financial sector without undue strain. This article aims to give an overall picture of capital investment in UK oil exploration and development on the UK continental shelf in this period and of how it has been financed.