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In May of 1964, the United Kingdom first issued to oil and
gas companies licenses for exploration of and, if commercial oil
and gas reserves were discovered, for development and production
of oil and gas resources in the North Sea. The next three United
Kingdom license rounds relating to the North Sea took place in
August of 1965, September of 1969, and June of 1971. During
these four license rounds, crude oil prices generally remained at
approximately $3 per barrel.
In 1970, oil discoveries were reported in the North Sea.
However, oil reserves in the North Sea remained unproven. The
North Sea was considered a marginal oil prospect, and oil
production did not begin in the North Sea until 1975.
In the first four license rounds, the United Kingdom offered
areas that covered almost all of the North Sea, but oil and gas
companies did not apply for most of the areas because of the
risks and uncertainties involved. Of the areas offered,
applications for licenses were received for only 35 percent of
the areas. Licenses for a number of areas not applied for when
first offered included what in later years became the largest and
most profitable oil-producing fields in the North Sea.
The areas that turned out to be the most significant oil
fields in the North Sea were licensed by the end of the fourth
license round in 1971.
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Last modified: May 25, 2011