2002 Strategic Environmental Assessment SEA3 Technical report - Socio economics of hydrocarbon licensing (North Sea)

This report is a contribution to the Strategic Environmental Assessment (SEA3) conducted by the Department of Trade and Industry (now Department of Energy and Climate Change). This study provides forecast information on probable activity levels, capital expenditure, tax revenues and employment resulting from exploration and production in the SEA3 area. The SEA3 area comprises 330 blocks or part blocks in the Central and Southern North Sea. Estimates were made of the reserves which might be discovered or developed. A cautious view was taken of the number of new developments which might emanate from licensing the area. The related exploration, appraisal, development and decommissioning costs were then estimated. Economic modelling was undertaken for different oil and gas prices to calculate for each development gross revenues, development costs, operating costs, and decommissioning costs. The taxation implications were also calculated. The impact of licensing the SEA3 area on the level of employment in the UK has been calculated. The proposed licensing would make a modest but worthwhile contribution towards moderating the downward trend of employment in the North Sea industry.