ABSTRACT
This chapter provides how production has evolved over time, driven by internationally set price signals and capital investment. It shows how a high current operating cost base and an ageing infrastructure could lead to unexploited oil and gas reserves being permanently stranded. The North Sea oil and gas sector has been a significant contributor to the Scottish and UK economies since the 1970s. The importance of the oil and gas sector to the Scottish and UK economies is more than just the contribution it makes to UK taxes revenues. The impact and importance of the oil and gas sector to the North East region of Scotland is stark given its regional Gross Value Added per capita was second only to London in 2011. The future for the oil and gas sector in Scotland is inevitably dependent on what happens to internationally set oil prices.
