OIL: High Costs, High Stakes on the North Sea

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Oil began flowing to Britain in June, arriving by tanker from the Argyll field. Energy Secretary Anthony Wedgwood Benn, raising a flask of crude on high, called the event cause for "a day of national celebration." Next month oil should begin moving from Britain's promising Forties field through a 120-mile pipeline to Cruden Bay on Scotland's east coast. Some time during the next few weeks, crude will begin arriving at Teesside, England, through a 220-mile pipeline from the Ekofisk field in Norway's sector of the North Sea. The oil belongs to Norway but is being pumped ashore to Britain; a deep undersea trench has prevented construction of a pipeline from Ekofisk to the Norwegian mainland.

Expensive Barges. Even before oil begins flowing heavily, the North Sea's prospects are spurring radical changes in oil technology. When exploration began, the most important model of an underwater operation that oilmen could go by was the Gulf of Mexico, which has been dotted by U.S. drilling and production platforms for a generation. The North Sea soon turned into a stern teacher. Laying pipelines, for example, called for bigger, more sophisticated and more expensive barges than any ever used in the Gulf. Because choppy seas often prevent tanker loading, some method for temporarily storing great quantities of oil at sea was called for. The result: CONDEEP— a giant concrete-reinforced production platform with huge storage tanks. A Norwegian innovation, two CONDEEPs have been put in place in the British sector; each cost $300 million and has a storage capacity of 900,000 bbl. The tow alone, 163 miles to one field and 225 miles to another, cost $2.7 million per unit — the biggest and most expensive tugboat operation in history.

Nowhere, though, has the North Sea's impact been more evident than on the political and social landscape. Scotland has turned into a tartan Texas—with an ego to match. Scotland wants the oil landing on its shores for itself, and the issue has reopened an old wound: Scottish nationalism (see box).

Some 7,000 foreigners, mostly Americans and French, have moved to the ancient 8th Century port city of Stavanger since it became the center of Norway's oil industry. Housing is in short supply, and high-rise apartment buildings are going up to accommodate a metropolitan population growing at 2% to 3% a year; it now stands at 150,000. Wages are high—for some skills twice those in the U.S.—but so are prices. Scotch costs $3.50 a shot, discouraging noisy sprees by roustabouts and divers and keeping Stavanger almost as quiet and staid as ever. Because of Norwegian taxes, a Toyota shipped from Japan costs $9,500, as much as a fully equipped Cadillac in the U.S. Cigarettes are $1.50 a pack, and groceries are double U.S. prices. Don Greenlee, 47, a Texan production superintendent for Phillips at Ekofisk, takes the prices in stride. Says he: "It costs more to live here, but there are not as many things to spend your money on. Financially, we probably make out a bit better."

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