ABSTRACT
The development of government policies towards North Sea oil and towards oil companies is a dynamic process. Policy development is dynamic not only because of changing historical conditions before and after 1973-4, but also because policy-making is essentially a learning process. In developing their oil policies the two governments were operating within two distinct frameworks; one domestic and one international. In their national political systems and domestic economies, both the UK and Norway had, at least since 1945, strong traditions of government intervention in economic life. In many ways the depletion policy is the key policy element, as it heavily influences the bargaining position of the government in relation to the companies. A government opting for a high rate of extraction will necessarily be more exposed to the demands and needs of private companies controlling the relevant technology than a government opting for a low rate of extraction.
