An article in the March 1982 Bulletin discussed the development and exploitation of oil and gas reserves in the North Sea and examined the implications for the UK onshore economy. After a gap of almost five years, the present article updates and modifies the earlier analysis. Developments up to the end of 1985 are compared with what was expected at the time of the previous article and some illustrative projections are made as to possible developments in the years ahead. Some macroeconomic implications of the North Sea endowment and of changes in oil prices are briefly considered. The Bank is grateful to Wood Mackenzie & Co for providing a number of projections and calculations.