ABSTRACT

The Influence of Offshore Leasing Regimes on Commercial Oil Activity: An Empirical Analysis of Property Rights in the Gulf of Mexico and the North Sea

By Christopher F. Richardson

The paper examines, on a comparative basis, the legal regimes that shape offshore oil activity in the United States and the United Kingdom . This important topic has heretofore been ignored in the legal literature. The note highlights how differing property arrangements can impact natural resource management. After an exhaustive review of literally thousands of data points, I was able to select a representative sample of oil fields in both the North Sea and the Gulf of Mexico and investigate how the underlying property rights regimes influence capital costs, competitive behavior, and efficiency. The results were somewhat surprising, and I discovered that while it seems the capital costs are indeed higher in the Gulf, as predicted, the depletion rates are unexpectedly higher in the North Sea despite the presence of factors which would tend to encourage competition.