Faced with the collapse in oil prices, the two dominant North Sea producers are taking opposite approaches to bolster dwindling investment: The U.K. is offering carrots, while Norway is wielding a stick.
Britain plans to extend the 1.3 billion pounds ($2 billion) of tax cuts granted to producers in March after more than one in three fields was rendered uneconomic by the slump in crude. In contrast, Norway has shunned incentives and warned companies that scrapping projects could hurt their chances of getting new Arctic licenses.
The differing strategies highlight the divide between depleted British waters and the untapped potential and larger reserves on the Norwegian side of the North Sea. Norway can afford to be uncompromising, while the U.K. struggles to extend the life of aging and higher-cost fields.
