The 1959 discovery of oil and gas in the North Sea provides the analyst with an opportunity to observe the design of institutions governing the extraction of natural resources. Three states - the UK, the Netherlands and Norway - all industrialized, constitutional monarchies, faced significant political, economic and technical challenges in managing their new-found resources. All three states shared similar histories and yet designed different institutions to govern the extraction process. The wide variation creates a most similar systems comparison, lending itself to guided, constructed qualitative analysis. This analysis shows that regime preferences, domestic demand and international prices are significant variables in explaining the choice of level of state participation in the extraction process