OIL AND THE NORTH SEA: A NEW HOPE.

Don’t look now, but there’s actually some good news coming out of the North Sea. The region helped make the UK a net oil exporter in the 1980s, but in the intervening years its offshore fields have matured and production has declined dramatically. To make matters worse, companies operating in the decreasingly profitable region are facing decommissioning costs that one industry group predicts will add up to £17 billion over the next decade. When you factor in the bearish turn oil markets have taken in recent years, you get a perfect storm for one of the UK’s most important energy resources.

But London will be heartened by what it’s seen in the North Sea in 2017. Operating costs have fallen nearly 50 percent, an industry reaction to today’s low-price environment, and that’s allowing firms to keep more existing projects in operation. In March, a new field was discovered off the coast of the Shetland Islands that has been hailed as “the biggest new oil discovery beneath UK waters this century.” Then, this summer, the British oil company Enquest started production in its ominously named “Kraken” oil field—a project that could save the firm from insolvency.

Release the Kraken!