UK Crude Oil has played a major role in the UK economy during the 1970s and 1980s for two reasons:
[1] The price of oil has fluctuated dramatically.
[2] Due to higher oil prices, there has been large-scale expansion in investment in North Sea oil production, resulting in the UK becoming a major oil-exporting nation.
The first North Sea oil came ashore in June 1975 and is thought to have peaked in 1999, with more than 40 billion barrels extracted so far. Brent Crude is $108 a barrel. So a very “crude” calculation of this value (ignoring inflation and the historical oil price):
$108 x 40,000,000,000 = $4,320,000,000,000 = £2,853,220,000,000
£2,853,220,000,000 = £2.853 Trillion = £2,853 Billion = £2,853,200 Millon
Oil production was negligible before 1975 but by 1980 it had risen to 603 million barrels per annum, 2.6 per cent of world production. Output from 12 crude oil fields average 2 million barrels per day. So with Brent Crude at $108 a barrel:
$108 x 2,000,000 = $ 216,000,000 = £142,661,000 a day
£142,661,000 = £142.611 million
The 4 major North Sea oil fields are Brent, Forties, Oseberg and Ekofisk (BFOE). They are set to pump around 1,000,000 (1 million) barrels per day.
A “crude” way to value the North Sea to the UK is to look at the value of Shell and BP
BP
[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=10022&record_search=1&search_phrase=bp]
£ 87,828m
Shell A
[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=133655&record_search=1&search_phrase=shell]
£ 84,419m
Shell B
£ 58,364m
∑(£ 87,828m + £ 84,419m + £ 58,364m) = £230,611 million = £230.611 billion
The “crude value” of BP & Shell to the UK = £230.611 billion