LONDON -- The 1973 Arab oil embargo acted as a spur to some of the most adventurous engineering projects in the world, turning the hostile environment of the North Sea into a massive money spinner for the British government.
Prime Minister Margaret Thatcher recently inaugurated the latest and one of the most ambitious of those projects -- the huge British Petroleum Magnus oil field 125 miles northeast of the Shetland Islands.
Not only is the Magnus field the most northerly in Britain, it is also among the world's deepest offshore oilwells at more than 600-feet. To tap the oil and cope with 100 mile-per-hour winds and 100-foot waves, engineers built a 70,000-ton platform that stands on legs higher than the Eiffel Tower in Paris.
Oil company executives say that without the 1973 oil price shock it would have been uneconomic to carry out such developments. British Petroleum and its partners, for example, will have invested some $2 billion before seeing any return on their money.
Britain has 27 oilfields either in full operation or about to come on stream, making it the world's fifth largest producer, with an estimated output this year of 2.11 million barrels a day of high-quality crude oil in addition to gas and gas derivates.
This has made Britain a potent force in countering the 13-member Organization of Petroleum Exporting Countries. By pegging its price slightly below the level set by the cartel, Britain was largely instrumental in bringing down the world price level early this year - one of the factors contributing to the West's current weak economic recovery.
The decline of the pound against the dollar means that Britain actually has increased its oil revenues in sterling terms despite the price fall.
Oil earnings account for 5 percent of Britain's gross national product. Last year the government earned $21 billion in oil revenues.
The oil boom has been a mixed blessing, however.
Petroleum drove up the value of the pound in the early 1980s, undermining Britain's traditional export industries and contributing to mass unemployment.
The oil industry itself is capital rather than labor-intensive. It has created only about 100,000 jobs, but more than two million others have been lost since Mrs. Thatcher came to power in 1979.
Critics accuse the government of splurging oil revenues on unemployment pay and social security benefits instead of using them to invest in new industries and jobs for the future.
The bonanza will not last for ever. Britain now produces 75 percent more oil than it uses, but by the early 1990s it is likely to be a net oil importer again.
The Magnus field, with estimated recoverable reserves of 4.2 billion barrels, will be the last of Britain's major North Sea developments unless fresh reserves are discovered. Industry analysts say the oil companies will have to run harder in future to keep up with current output by developing deeper and more marginal fields.
But it could take 30 to 50 smaller fields to match the output of the Brent and Forties fields, which now produce the bulk of Britain's oil from beneath the sea bed.