Summary This paper reviews U.K. Continental Shelf (UKCS) field developments to date for technical features, development time scales, and economics. Current UKCS field-development trends are identified, including use of subsea completions and floating production platforms (FPP's) for development of small deepwater fields. Economic comparisons are presented for a range of field developments under existing U.K. tax and fiscal regimes. The effects of unstable oil prices on rates of return (ROR's) are discussed, together with the effect prices on rates of return (ROR's) are discussed, together with the effect of tax changes on field economics. Introduction The North Sea is a mature oil province in which current developments represent the third generation. Total UKCS oil production passed its peak rate during 1985, and attention must focus increasingly on investment in new fields to replace declining production from the 30 oil fields now on stream. The current economic climate, however, is unfavorable to new investment in UKCS oil fields. World oil prices* collapsed from $31/bbl [$195/m3] in Nov. 1985 prices* collapsed from $31/bbl [$195/m3] in Nov. 1985 to below $9/bbl [$57/m3] in July 1986, recovering to around $14/bbl [$88/m3] in Oct.86. This oil price collapse of 70% within 9 months has dealt a staggering blow to our industry, which has seen a decline of some 6 x 10 6 B/D [0.95 x 10 6 m3/d] in total free-world oil demand since 1979. The situation is further exacerbated because future UKCS projects will develop fields of steadily diminishing size in terms of recoverable reserves. This dual penalty of reduced field size for development and markedly lower oil prices makes it very difficult at this time to justify needed new investment in UKCS oil fields. The prospect for continuing development of UKCS gas fields appears healthier. Gas developments relate more closely to those for alternative sources of primary energy, such as coal or nuclear power. Gas supply contracts are long-term rather than spot-market related, with specified prices and minimum offtake quantities, take-or-pay clauses, and strict formulas for price adjustments. Such measures are necessary to safeguard the large investment in fully dedicated field facilities and the infrastructure of an export pipeline and onshore terminal needed to get the gas to the particular market to which it has been contracted. UKCS gas contracts have traditionally embodied price indexing on the basis of a balanced mixture of oil, other primary energy, and general inflation factors. As a result primary energy, and general inflation factors. As a result of the oil price collapse, more emphasis is likely in new gas supply contracts on oil and oil products price indexing, perhaps also with an oil-price-linked override to allow for perhaps also with an oil-price-linked override to allow for sharp and sustained falls in oil and products prices. Potential UKCS gas resources and projected U.K. gas demand are closer to being in balance, with most analysts predicting a net shortfall by the mid-1990's. Thus predicting a net shortfall by the mid-1990's. Thus overall prospects for the UKCS, in particular southern basin gas developments, remain fairly good, as evidenced by the continuation of such projects as Conoco's V-fields and Lincolnshire Offshore Gas Gathering System (LOGGS) and British Petroleum's (BP) Cleeton and Ravenspurn South fields, including a new trunkline and onshore terminal. This contrasts sharply with recent setbacks to major oilfield developments, such as Shell Esso's Gannet/Kittiwake complex or BP Conoco's Miller. For these and other potential UKCS oilfield developments, major reviews are necessary to cut costs substantially in response to the oil price collapse. Now seems an appropriate time to review historic costs, development trends, and economics for aid in future field developments. The precise timing for a number of these developments remains in question, but there can be little doubt that the majority of UKCS fields remaining for development will be produced in due course. This paper is confined to consideration of only UKCS fields, with reference being made to others where appropriate. Southern Basin Gasfield Developments In 1959 a giant onshore gas field was discovered at Groningen, northern Holland, in Permian Rotliegende sandstone formations. This event sparked the search for hydrocarbons in the North Sea. From the mid-1960's, a number of Permian gas fields were discovered in a trend stretching across the southern North Sea from Holland to the U.K., which is still being drilled intensively. Table I gives a chronology and summary of facilities, and Table 2 gives a summary of costs and economics, for UKCS southern basin gas fields. Capital costs for these developments are low compared with those for North Sea oil fields. However, real ROR's for the earlier projects are low because of very low gas prices negotiated by British Gas when it was the monopoly prices negotiated by British Gas when it was the monopoly buyer. JPT p. 1311