THE PEDALTO INSTITUTION FOR INCORPORATED ART

 
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CONTROL LICENSING AGENCY

DIRECTOR   Viktorija J√§rvinen

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A further factor is bureaucratic control. Licensing rounds at regular intervals and of predetermined size could reduce uncertainty with respect to oil company planning. However, this would detract from the government bureaucracy's position as the overseer and protector of offshore oil and gas reserves on behalf of the government and of the country. The government bureaucracy's interest may be satisfied by the public perception of the bureaucracy being solely able to control policy implementation. Furthermore, politicians would consider the size and timing of licensing rounds in a political vote-maximising context. The first two rounds in consecutive years resulted in 90 licences being issued. This was a sizeable licence issue and largely accounted for the delay between the Second and Third Rounds. During the 1960s licensing policy was used by politicians in order to implement their overall rapid exploitation policy and as in the late 1970s when licensing policy was used to slow down development (relative to the market determined rate) these are policy decisions based on political rather than economic judgement. Following the awards of licences in the Third Licensing Round the government perceived a change in factors affecting North Sea oil policy. Oil had been discovered by Shell, Phillips and BP in areas leased in the second and third rounds. These finds required further appraisal work in order to determine the extent of reserves. The Ekofisk oil field on the Norwegian Continental Shelf was discovered in November 1969 and by mid-1970 evidence 'suggested the presence of a significant oil producing basin'.16 A further factor was the Libyan Government's success in increasing its take from oil company concessionaires in September 1970. At the same time there was concern at the slowdown in drilling activity in the UK sector and acreage surrendered as a result of the first and second licensing rounds could now be offered again. These factors encouraged the government to institute a Fourth Licensing Round in 1971 and the main policy criteria were, as in previous rounds, speed of exploration and development and ensuring the representation of domestic interests.