This gaper examines the economics of oil and gas exploration and developmen
t in the West of Scotland region. A considerable exploration effort has res
ulted in some discoveries but the overall success rate has been quite low.
The region is comprised of several distinct geological basins. To date the
Judd Basin has experienced the best discovery rate. Expected returns as mea
sured by expected monetary values are generally low, confirming the high-ri
sk nature of the region. The most economical field development concept depe
nds to a large extent on a combination of field size and water depth which
vary markedly from basin to basin. In typical cost conditions at an $18 pri
ce returns to investors in medium and large-sized fields at the development
phase are positive, but at $14 only when costs are relatively low are posi
tive returns in prospect. Stand-alone gas developments are very unlikely to
be viable in current market conditions. The fuller exploitation of the who
le region requires higher oil and gas prices and /or significant innovation
and technological progress. (C) 2001 Published by Elsevier Science Ltd.