[1] The Government's policy was to keep the North Sea fiscal regime under review and to make changes where appropriate to ensure that the right climate existed for further exploration and development.

There were a number of significant gas prospects in the southern basin of the North Sea which were economic before tax but uneconomic in the then current fiscal regime.

[1] For example, in early 1988 Hamilton Brothers had announced, directly as a result of the Government's intention to abolish royalties in the southern basin, to develop the Ravenspurn North field.

[2] The Act's second purpose enabled the United Kingdom to implement the agreement negotiated with the Irish Republic on the delimitation of the continental shelf.

Its long title is: ‘An Act to confer on holders of certain petroleum licences an exemption from royalties (including royalties in kind) in respect of petroleum from certain onshore and offshore fields and to confer power to amend the Continental Shelf (Designation of Additional Areas) Order 1974 to give effect to an Agreement made between Her Majesty’s Government in the United Kingdom and the Government of the Republic of Ireland relating to their respective rights in relation to the continental shelf.’ The Act comprises three substantive sections and a schedule.