Exxon Corporation - Page 5




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               With regard to North Sea petroleum resources, the United               
          Kingdom generally used a discretionary licensing system under               
          which the United Kingdom selects oil companies to which licenses            
          are issued from a pool of companies that apply for the licenses.            
          This enabled the United Kingdom to further governmental                     
          objectives such as rapid and appropriate exploitation of North              
          Sea petroleum resources.  In contrast, under an auction licensing           
          system, licenses are issued to the highest bidders who are not              
          necessarily the most financially sound or competent companies to            
          develop petroleum resources associated with the licenses.                   
               Further, at least in the 1960's and early 1970's, due to               
          uncertainties and risks associated with exploitation of North Sea           
          petroleum resources, it was generally expected that with regard             
          to the North Sea resources, the United Kingdom would not raise as           
          much revenue from an auction licensing system as from a                     
          discretionary licensing system.                                             
               In June of 1971, as part of the fourth license round that              
          was generally conducted on a discretionary basis, the United                
          Kingdom experimented with an auction system and invited bids for            
          15 areas.  The winning bid (by Exxon and Shell) for one of the              
          auctioned areas (involving a field adjacent to where Exxon and              
          Shell had already discovered oil) was for �21 million, but the              










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