Petroleum Policy and Prospects in the UK Continental Shelf (UKCS)

This chapter discusses the projections of production and expenditures have been made through the use of financial simulation modelling, including the use of the Monte Carlo technique, informed by a large, recently updated field database validated by the relevant operators. The financial modelling incorporates a threshold or hurdle rate, field economic cutoff, and the full details of the current petroleum tax system. The UK Continental Shelf is frequently described as a mature petroleum province. Petroleum Revenue Tax that the post-tax rate of return is equal to the pretax rate. Government policy encompasses tax and licensing issues. A key feature in terms of investment incentives emanates from the fact that the post-tax rate of return is equal to the pretax rate. The modelling incorporated assumptions based on recent trends relating to exploration effort, success rates, and sizes and types of discovery.