Will June 14, 2007, be added to the list of defining dates in the history of North Sea oil? The doomsayers might think so. The chronology goes back to 1964, when the first UK offshore licence was granted. Other important dates include 1967 (when the first gas field started production) and 1975 (when it was oil's turn). Production is past its peak and those of a pessimistic disposition will interpret yesterday's announcement that Shell, along with Esso, are to sell most of their northern North Sea assets as confirmation that the North Sea basin is on a slippery slope of moribundity.

Will June 14, 2007, be added to the list of defining dates in the history of North Sea oil? The doomsayers might think so. The chronology goes back to 1964, when the first UK offshore licence was granted. Other important dates include 1967 (when the first gas field started production) and 1975 (when it was oil's turn). Production is past its peak and those of a pessimistic disposition will interpret yesterday's announcement that Shell, along with Esso, are to sell most of their northern North Sea assets as confirmation that the North Sea basin is on a slippery slope of moribundity.

The North Sea is a mature province. The oil majors, including Shell and BP, have been scaling back their operations for many years as these global operators seek a bigger bang for their investment buck in other parts of the world. This has left opportunities for smaller, independent companies with a narrower focus on recovery to exploit. Yesterday's announcement was surprising mainly because so-called asset transfer deals had tailed off in recent times. In 2005, there were twice as many as last year. The industry cites the Chancellor's tax take on profits and the fiscal treatment of decommissioning liabilities for platforms, rigs and pipelines (tying in the seller of assets to the cost) as reasons.

But yesterday's announcement suggests, paradoxically, there is life in the North Sea yet. It is more than halfway through its predicted lifespan and will have much to contribute towards meeting Britain's energy needs and replenishing Treasury coffers before the last oil and gas are drilled out. The oil industry, let us not forget, is still highly profitable. One of the spin-offs from North Sea activity has been the accumulation of expertise in searching for and extracting fossil fuels in hostile environments. Shell had planned to build a £25m global engineering hub in Aberdeen, just the sort of project to showcase Scotland as a smart, successful country. However, this is to be scrapped. The hub will still be developed in existing premises in the city but there will be legitimate questions about Shell's commitment to retaining Aberdeen as centre of its global operations without the new centre. The decision could have a damaging effect on the city's prospects to be home to the proposed Institute of Energy Technologies planned by Gordon Brown.

Carbon capture is an activity in which this institute would develop expertise. Splitting fossil fuels into hydrogen, to provide power, and carbon dioxide, to be injected out of harm's way into the seabed, is complex but if the North Sea is to have a life beyond standard activity, the technology will have to be developed at a bearable cost. If yesterday's announcement boosts asset transfer activity, it will probably be beneficial, provided the effect on jobs is minimal. Developing new ideas and exploiting new technologies are the key to the future.