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Costly Dip. With so much riding on North Sea oil, each government is moving to make sure it gets its share of the riches. Britain has been plagued as much as any other European nation by the quintupled price of Middle Eastern crude, on which it is so dependent. Yet, ironically, it now has a stake in high world oil prices. Britain's North Sea oil is about 15 times more expensive to develop than Middle Eastern crude, so even a dip of a dollar or two in the world oil price, to $11 or $12 per bbl., could render the oil from some fields unprofitable. Says Oil Expert John Lichtblau: "It's no wonder that the industry joke at the moment has Harold Wilson joining Britain to OPEC and asking for a rise in the price of oil."
A drop in the world price is not likely; on the contrary, OPEC will probably raise prices another 12% this week at a meeting in Vienna. But Britain is taking steps to secure all the supplies it can, fast. Earlier this year, the government said it would set up the British National Oil Corp. to compete with private companies in exploration, production and refining. Presumably, it will move into marginal fields now avoided as uneconomic by private companies. Currently, anything smaller than 100,000-bbl.-per-day production capacity is regarded by most companies as not worth their commercial effort.
Britain has also proposed buying a 51% government interest, or "participation," in private companies' ventures in the North Sea. Supposedly, this would eventually steer half the oil revenues and profits to the nation's treasury. But oilmen, and even a few government officials, see little point to participation. Britain can get its proper share of the spoils through tax and conservation laws already on the books, or headed for passage, without buying control.
Norway's policy has been to tap its oil wealth slowly, so as not to bring in gushers of money all at once and disrupt the economy. Unlike Britain, though, Norway has firmly made up its mind as to what role the government should play. Through Statoil, the state oil company, Norway controls most of its oil industry. It buys up to 75% interests in production ventures; Statoil and Mobil along with other oil companies are partners in Statfjord, Norway's biggest oilfield yet (3 billion bbl. in reserves). Headed by Arve Johnsen, a 41-year-old economist and lawyer, Statoil aims to become a fully integrated company, exploring, drilling, producing and refining oil. It already owns participation rights in 38 exploration areas, or "blocks," off Norway's coast.
Newer Frontier. There is little doubt among oilmen now that the North Sea will pay off for its biggest gamblers, although just how much remains to be seen. For whatever oil it has left over for export, Britain should find a ready market in Western Europe; about one-fifth of Europe's energy may eventually come from the North Sea. Norway is already feeling pressure to speed up development from industrialists eager to spur the economy, and it probably will do so in the chillier, deeper and more treacherous waters above the 62nd parallel where even richer oil deposits may lie. Already there is preliminary exploration activity far from the North Sea—running off the Irish coast, even north into Greenland. Still a frontier itself, the North Sea is already serving as a steppingstone to another.