The debate around Oil & Gas is one of the most peculiar aspects of Scottish life. Throughout my life the sector has been mentioned with various billions of £££ associated with it. Occasionally it will be reported that a field will have ‘£x billion’ invested in it and regularly there is discussion on how many ‘£yyy billion’ the industry is worth to the government. The impression has always been that sums of money flow out to sea and then more comes back in with the tide; the UK political parties and media have made sure the Scottish psyche is such that Oil & Gas might tick along for a while but the tide won’t flow much longer, and thinking anything else is a high risk strategy.
This hasn’t passed without consequence. Inexplicably the Oil & Gas sector was not mentioned once as a possible career at any point during my High School education or during my 4 years studying Maths and Physics at Glasgow University. And so the story goes for thousands of Scots, particularly in the Central Belt, home to one of the world’s most technologically advanced industries and yet oblivious to the potential opportunities that this brings directly to them.
The reality is that there are many phases and skillsets required to realise the large scale investment to develop or enhance production from a reservoir. Indeed it is estimated that ~400,000 people work in the UK Oil & Gas sector and this number is set to grow by 15,000 over the next 5 years (as noted by Vince Cable on the BBC alongside the good news of BP’s recent West of Shetland investment: BP and partners announce $500m Clair field appraisal). There are few skill sets that aren’t required to make this growth possible, and wouldn’t it be good to imagine that we have a workforce in Scotland ready to step in to meet this demand (HeraldScotland – Skills Shortage Fear for North Sea Firms). Training will be required but this should be possible. Last November I was in the US and there was an advert on the TV about how the Oil & Gas sector was helping the economic recovery with an overview of the thousands of new jobs being created. Such high profile promotion of the sector is almost unthinkable in the UK, for some reason the positive impact of the industry is kept on a ‘need to know’ basis.
My own involvement has been in the offshore Seismic Survey business, I’ve predominantly worked supporting the business from onshore but have also spent more than 500days offshore on either 3D exploration surveys looking for new development opportunities or time-lapse (4D) surveys to enhance the recovery from producing fields. The Seismic business is global but a significant percentage of the fleet has descended on the North Sea every summer for my 11 years in the business. Interestingly, there were more vessels in the North Sea during 2012 than ever before with 23 vessels, or ~20% of the global fleet, in the area. New techniques are giving a better image quality of the subsurface, identifying potential development opportunities with increased accuracy at shallow and deep targets.
2012 wasn’t only a busy year for Seismic Surveys; it also saw the UK’s largest ever response to a licensing round – with 167 of 224 applications accepted. So there are more companies looking to drill in more blocks than ever before. The spotlight of the independence debate missed the Energy Minister John Hayes when he gushed: “Fortune has favoured the UK. Oil and gas from our waters provides around half the energy we need to heat our homes, fuel our cars and power our industry. It is the single largest industrial UK investor, supporting 440,000 jobs, and benefits the UK’s trade balance to the tune of £40 billion.” (DECC announces awards for United Kingdom 27th Licensing Round (the map in there is worth a look as well)). Not only is Oil & Gas the UK’s single largest industrial investor but one third of all UK industrial investment is in Oil & Gas! This is fundamental and very significant, but the media have neglected to provide this context in the regular reports on Scotland’s potential in the event of a Yes vote in next September’s referendum. The UK economy isn’t as diverse as the anti-independence campaign claim, but that’s part of the problem with our big central UK government – it is so massive that very few people know what’s what and the result is that our politicians have become unaccountable and therefore perpetual failure from Westminster is tolerated.
As the entire Scottish economy is brought into focus to provide the context for the referendum, an understanding of Scotland’s Oil & Gas is very important. Indeed Alastair Darling was asked a couple of questions on this during an online Q&A session (As it happened: Alistair Darling’s webchat). They were:
- In the event of separation (sic), do you think the UK will gladly hand over 90% of the oil like the SNP assert? Wouldn’t the UK argue that since it invested in Oil and Gas, it should have a larger share?
- The SNP claim 90% of North Sea oil and gas revenues by virtue of geography but there is no Westminster / Holyrood agreement to back up the claim. As a UK asset that would need to be negotiated over in the event of Independence, then on a population basis Scotland may only be entitled to 10%. What is your view on the share of North Sea oil and gas revenues that an Independent Scotland would legally expect?
Alastair Darling’s response was as follows: ‘Both of these questions are difficult to answer in that it would have to be subject to negotiations between Scotland and the rest of the UK. That’s not the only question. Who would meet the massive decommissioning costs in the North Sea, for example. This is an example of one of the many issues that could take some years to negotiate.’
In summary Alastair Darling implies that there is uncertainty over Scotland getting anything from 10-90% of Oil & Gas revenues and then deflects the questions onto ‘massive decommissioning costs’, with the intended affect being to leave uncertainty on whether an independent Scotland could handle the responsibilities that come with big business. These points characterise the entire anti-independence campaign: suppress the realities of Scotland’s wealth where possible and create ‘unanswered questions’ where questions don’t exist; they are as subtle as this Ian Brown – F.E.A.R. . This tactic has traction because the UK is gripped with fear just now thanks to successive mistakes from UK governments plundering us into recession. The ‘problems’ that Norway has just now are worth considering, after all this is a nation of 5million people with an equivalent amount of offshore infrastructure to manage: Norway – The Problems of Too Much Money . These ‘problems’ seem like a fantasy from the UK viewpoint where we work long hours for salaries that lag behind commodity price increases (Iain MacWhirter with some stats and excellent comment). It seems clear to me that a better alternative is available and there is no need to fear independence.
The questions posed to Alastair Darling do deserve an answer and unlike him I’m not afraid to do so. In the event of independence for Scotland, the Oil & Gas revenues will be determined by the same UN international law that the rest of the world plays by – United Nations Convention on the Law of the Sea (the Convention) – it turns out that the virtue of geography is indeed the determining factor when it comes to the ownership of natural resource. In this sense Scotland has the good fortune of having an abundance of Oil & Gas, with 90% of the current production in Scottish waters. Claiming that the offshore Oil & Gas revenues would be distributed on the basis of population share is equivalent to saying that only 9% of our golf courses would stay with Scotland after independence (noting that this is just an analogy, we’ll get to keep all 100% of our golf courses).
The UK clearly won’t ‘gladly’ hand over the Oil & Gas revenues – that’s just one reason why they are trying their hardest to prevent a Yes vote – however I think it is safe to assume UN law will be abided by in this instance. The point of ‘UK investment’ and Alastair Darling’s point about ‘massive decommissioning costs’ are related by the fact that private business operates the Oil & Gas sector in the UK. Chances are Alistair Darling is fully aware of UK regulatory documents such as www.gov.uk – Decommissioning Offshore (oil and Gas) Installations and Pipelines, which stipulate that the operator has the financial responsibility for ensuring satisfactory decommissioning:
2.5 It is a fundamental principle of the decommissioning regime that a person who is responsible for developing or operating an offshore installation/pipeline should also be responsible for decommissioning at the end of its useful life. The Department will therefore charge Industry a fee for approving and revising offshore (oil and gas) decommissioning programmes rather than passing the costs onto the taxpayer which is in line with the ‘polluter pays’ principle of environmental law.
It is worth pointing out here that unlike many other oil rich countries, the UK has thus far decided not to have a National Oil Company. I imagine the primary reason for this is the concern of outlaying the massive upfront investment costs required to get production going; it has been considered easier to let oil companies take the risks and to tax a % of their rewards (aka profits). The oil companies do compete against each other but one thing I was surprised to discover when I first got into the industry was how integrated they all are as well. They effectively work together to share the risks and profits from most of their activities. You’ll notice that for the BP investment in the West of Shetland, their partners in the appraisal drilling programme are Shell, ConocoPhillips and Chevron. Such partnership would be a relatively easy route in for a new National Oil Company, ‘ScotOil’ perhaps, if we were to choose this option.
With anything in Oil & Gas, there has to be context as the costs involved are so large. Even if the government was responsible for the decommissioning costs as pointed out here, they should be more than capable of making it still a significant net gain: Oil and Gas UK – The Voice of the Offshore Industry – Economic Report 2011 – Decommissioning
Decommissioning incurs very significant costs, but these should be set in context with the total sums involved in the industry, for example being only about 10% of the £300 billion of capital invested in exploration and appraisal drilling and field developments up to the end of 2010. They are similarly dwarfed by the £293 billion paid in corporate taxes to the Exchequer over the past 40 years (both numbers in 2010 money).
Despite the various headlines, the potential that the Oil & Gas sector brings to the independence argument has yet to really feature in the mainstream debate. Rather than meaningful debate on the substance behind the opportunities and options here, we have simply had sensationalist headlines on the fine detail of exactly how rich we’ll be and whether that wealth will last 40 or 100 years! That in itself is of course significant and such timeframes are surely enough to invest in Scotland’s future economies. However this debate has been framed on forecasts assuming ‘business as normal’ with the only suggested change being from the troubled Greens who appear to see Oil & Gas as their kryptonite, but it needn’t be so. The ‘ScotOil’ option is just one option for fundamental change in the business, but even enhancing the link between education and the sector would be a big step forward, with perhaps government led initiatives to establish offshore apprenticeships as a core requirement for producing in our waters. The environmental campaign groups continually misjudge their role in the Oil & Gas industry in my opinion. They appear to play a blanket anarchist role, feeling the need to oppose the very existence of the sector and thus refusing to engage in any constructive contribution on how to optimally manage the process and proceeds. In terms of process, they could monitor best practice in the industry and help ensure the UK / Scottish sector is performing to the highest possible standards. In terms of proceeds, they could campaign for a tax on any operator saying that a certain % of their profits have to be used to invest in renewable energy resources. This could either be directly driven towards their own internal Research & Development (noting auditing of this would obviously be required) or in a ring-fenced taxation pot.
It is also worth noting that Scotland and Norway are the 2 key providers of oil to the EU – surely it is in the interest of the area that we maximise the recovery locally, rather than rely on essential resources to be imported from other regions (supporting local produce being a key Green principle that I fully support!). In terms of maximising recovery, I was shocked when I initially learned that the target for many reservoirs was to get 30-40% of the oil and then leave it, the thinking being that the investment required to get the additional oil would not return sufficient profits. That said, the industry has invested heavily on maximising the recovery from some existing fields; with the necessary infrastructure in place it makes both economic and environmental sense. This is only happening in select cases though, most notably with the major oil companies, and it is hard for smaller independent operators to invest in the same way. There is the opportunity to improve this – for example it could be defined in the licensing process that a company won’t be allowed to start a development program without detailing a strategy for maximising the recovery from the field and a National Oil Company could be used to ensure the financial backing is present to help the independent operators maximise the potential recovery (with the profits apportioned accordingly). I believe such a requirement exists in the Norwegian licensing process and it is no coincidence that their National Oil Company, Statoil, are considered to be one of the world’s leading companies in enhanced recovery techniques.
It certainly isn’t too late for Scotland with the Oil & Gas sector, however if we leave things in the hands of the UK government then there is a high danger that we’ll fail to use these years of financial wealth to diversify our economy sufficiently. Scotland’s society suffered badly when our heavy industries were dismantled under the UK government – only a Yes vote in the independence referendum will ensure that we can enhance our economy to enable a smooth transition on the day that the oil does run out.
Some additional notes:
- It was just over 20 years ago that the Norwegian government established an Oil Fund, ring-fencing profits from the sector to be used to provide security on pensions for the Norwegian people. A worthy cause. I particularly like this comment piece by Ian Bell on this and the relevance of it to the Scottish independence debate: heraldscotland.com/dirty-sexy-money (Norway’s oil fund was worth $683.7 billion at the end of last year. Its value is expected to reach $1 trillion by 2019. It is the biggest pension fund on the planet and owns, among other things, 1.78% of all the stocks and shares in Europe.)
- As it happens I was offshore in the North Sea when the McCrone Report was made publicly available during 2005. I was dumbfounded by the low-key coverage of this, with this article being on the BBC Scotland site for a few hours: http://news.bbc.co.uk/1/hi/scotland/4238744.stm. I’d recommend reading this blog which covers key points on the topic, from the report and other sources: McCone Jappy and the Big Fat Better Together Deception
- The Government Expenditure & Revenue Scotland (GERS) report gives a good overview of the nation’s finances as things stand – html: Government Expenditure & Revenue Scotland 2011-12 or PDF: Government Expenditure & Revenue Scotland 2011-12.pdf.
- Stephen Noon wrote a good blog recently capturing how the UK parties attempts to downplay the significance of the Oil & Gas sector in the Scottish independence debate: Stephen Noon – We’ve Heard It All Before , with the links helpfully provided on Wings Over Scotland: The Oil Debate For Busy People
Darling Blogs 
i dont normally dont read long drawn out articles ,,but i was engrossed till the end ,,,,very well put and thoroughly enlightening ,,thank you ,,yours,,billy johnston
Thanks for reading and for the comment Billy.
An interesting read as always Stuart! As you know I’m not a YES! but I am willing to consider the options.
I guess what concerns me is some of the points you have highlighted, we don’t know how much of the oil revenue we will receive, we don’t know how long the oil will last, we also don’t know what will happen about Europe, the pound, the armed forces… Its kinda of agreeing to move into a house without having the full survey – other similar houses (norway) are great, but does that hold for ours? I have concerns that Scotland’s social welfare and health budget will be difficult to meet if this promised oil bonanza doesn’t last. I want a fair and equal scotland and independence from Westminster where inequality seems to be the aim would be a great start. I just need to be convinced of the detail!!
I was hoping to highlight here that we do know what oil & gas will belong to Scotland. Oil & Gas it is the single biggest industry in the UK right now and the Westminster government is doing nothing to diversify the economy (in fact, they’ve been decimating many other sectors). With the increased visibility that we’d get in an independent Scotland I don’t believe we would tolerate such colossal mismanagement.
It isn’t that we’re looking to move to a new house – we’re simply looking to stop giving money to our neighbour and letting them make decisions for us (which we often-times don’t agree with).
As for social welfare, Scotland’s unemployment & social inequalities will only be reduced when we do make the most of the industry that we have on our doorsteps – get the youth of today trained for a future in the Oil & Gas sector and they will develop great skills that will enable them for a life of work. The opportunity that I was hoping to highlight here is that we should be using this wealth to diversify our economy as well – creating new jobs in emerging sectors or growing the solid base that we have.
I’ll have blogs to come on currency, defence and the EU – hopefully I’ll be able to address some concerns there (even if through further debate on the back of those posts).
Thanks for reading and commenting.
Excellent article Stuart. The difficulty is that it is, and has always been, in Westminster’s interests to play down the scale of the oil wealth generated since the discovery of North Sea oil. How often is it ever mentioned? It was noticably absent once again in almost all the blanket media coverage of the death of Mrs Thatcher. This is almost inexplicable given the seismic effect it had on her Government’s finances. It is difficult to mount a convincing argument that her Government and every Government since have done anything but squander this wealth. Given the poor state of our infrastructure, poverty levels and the increasing wealth gap between the South-East and everywhere else in the UK (apart from Aberdeen) this is shocking. Think of what could have done with that money. Think of what could have been done if any Government had had the vision to establish a wealth fund rather than use it to scrap the UK’s manufacturing base and pay the ensuing benefits bills for the past 30 years. And think what a country of 5 million could do with the remaining oil wealth. Westminster are trying to convince the Scottish electorate the oil is about to run out. All evidence points to the contrary. We must look to Norway’s example. The new scare story is that Europe wouldn’t want us. To which one can only reply, why would the EU refuse membership to the most oil rish country in Europe? The real question is, “What can EU membership offer an independent resource rich Scotland?”. Oil is not everything but it offers the opportunity to build a diverse economy and the kind of country and future we deserve. And we owe it to ourselves not to waste the opportunity it presents a second time. People will vote whatever way they feel best for the future and everyone has a stake. However, the current tactics of the UK Government in refusing to discuss the issues that matter and to spread scare stories and confusion are the hallmarks of a very low kind of politics.
Sarah – firstly all the points you raise are the same questions that many people have yet to be convinced of. The SNP publish the White Paper this autumn, which will fill in the detail for you as per their stated plans for the referendum schedule.
In the meantime, just as an exercise, why don’t you take all the questions and fears you have and change one thing: the name Scotland to the UK. After all, the UK relies on the finance industry to a much larger degree than an independent Scotland would on oil, and look at the catastrophic collapse in the City – shouldn’t your fears currently be directed towards Westminster ? – after all, it’s Westminster thats currently made such a mess of the country.
We don’t know whats going to happen in Europe, referendum in 2017 from Cameron, we know our armed forces in Scotland have been destroyed over the last 5/6 years to a fraction of what we were promised, currently we send over £3bn a year to Westminster on defence yet only see £1.9bn come back north. We could arm ourselves much more efficiently and actually have ships patrolling our seas – currently, under the UK, we have none.
We know that in Scotland we actually spend less on public spending/welfare than in England, and we know that we are in a better position to actually pay for those benefits, we also spend less in these areas than many of our European neighbours.
We also know that prior to 2008, Scotland has always raised enough in taxes to pay for our universal welfare and benefits without having to rely on oil. ( I always find it strange that people have this preconception that no-one pays any tax in Scotland, but of course we do, and we pay more than our fair share)
These figures are all out there, contained within GERS figures and other government reports and so on, Stuart has referenced some of them in his article above. If you want to read more on these issues, then I would thoroughly recommend some websites for you to have a look at. Yes they are all independence minded, but as the mainstream media are all UK- supporting, these websites provide a very valuable alternative view.
try
Bella Caledonia: http://bellacaledonia.org.uk/
Newsnet: http://newsnetscotland.com/index.php/scottish-news
Wings over Scotland: http://wingsoverscotland.com/
And remember, independence is not the end of the journey, it’s the start. It’s also not about the SNP – it’s about all of us as a people and what we decide we want to do. There’s nothing wrong with choice – starting with a blank page is not a bad thing, just get yourself engaged in the debate.
Good luck.
Hi Stuart – really like this blog. Would like to talk to you further about it if possible.
Stuart,
It’s great to see your work getting the attention and wider coverage it deserves.
We’re surrounded by air, land and sea a plenty. But some still girn it is too much to manage or too little to manage on. Or too difficult to decide which without the detail they deny exists being under their noses as they speak.
The big picture is that our tree of knowledge is as well stocked as our surroundings.
It’s not knowledge or skill the unpersuaded lack, it’s attitude born of low expectations.
Too wee, too poor, too stupid yet again.
Excellent stuff Stuart, once again.
A clear, concise rebuttal of the misleading information and obfuscation from the nay-sayers.
While it’s obvious that our economy cannot -and should not- be based on oil & gas alone, it’s patently clear that we have been blessed with a resource that most countries would give their eye teeth to have- a complete bonus. With these offerings, we can underpin our economy in the short term and completely transform it in the longer term, allowing us the opportunity to reduce national debt and invest any resulting profits for future generations to rely upon.
Best piece I’ve read on the subject to date. Given extra potency by the fact it was written by someone, like yourself, that has years of experience in the industry itself.
More power to your elbow.
Keep fighting the good fight.
Stuart,
FYI back in the late 80’s / early 90’s there was a British National Oil Company formerly known as BNOC (later renamed Britoil) which was in fact headquartered in Glasgow. As part of the Thatcher privatisation drive, Britoil was sold to bp who then subsequently shut down the Glasgow HQ and moved the jobs to London! How fair that was and how effective Britoil were I’m not sure but we should be cautious to call out for state run companies without looking back at the past and understanding the history.
And with regard to the post-independence divvy up, don’t you think we are in danger of cherry picking our selection principles when it comes to reclaiming Scotland’s share of UK assets? For instance, the national debt should be shared on the basis of population (because it’s big and horrible and it wasn’t our fault) whereas oil should be shared geographically (because it’s big and nice and it’s our oil isn’t it). Ok, so there are international conventions and precedence for territorial resources but in the case of oil nobody can surely deny that the development and success of the North Sea was due at the very least to a tremendous effort by UK scientists, engineers, geologists, geophysicists and so on (not to mention the huge International effort which may have been even more significant). Isn’t it right to consider this?
Without a full UK effort we might still be looking at simply the North Sea. The UK and all its constituent parts made the North Sea sector what it is today and surely should have some claim to its continued wealth? I’ve heard the same but opposite arguments being made about the Bank of England (it’s our bank too!). We should be consistent in this debate and fully acknowledge the entirety of UK input in all aspects of our society and industry here in Scotland, good and bad.
That’s what makes separation such a complex subject; it’s not just about the fear factor or the too small, too stupid merchants.
Food for thought …
Sawney
From what I understand, the British National Oil Company was a state-owned corporation from 1975 to 1982 – Thatcher didn’t wait long to ensure maximum short term return. The method that she introduced so drastically to the UK was short-term politics – in this case she sold off the national asset of hydrocarbons to give Private business the task of finding the necessary capital to maximise production in the short term – sharing the wealth with Westminster and business. Sadly the government wealth created was used to fund unemployment while many of our other industries were deconstructed.
I think the route back into a state run oil company should be a gradual process – the way that the Abu Dhabi national oil company TAQA (http://www.taqaglobal.com/our-regions/united-kingdom?sc_lang=en) has built its footprint in the North Sea is a good example of how it is still possible to grow a healthy share of producing asset. Of course, as the controller of new licence blocks there would be the opportunity for our own national oil company to set the agenda for future development…
The general consensus seems to be that Scotland will take the population share of the national debt (assuming we do keep the pound that is). As I mention in my blog post here – it is crazy to suggest that Scotland will only keep our population share of golf courses after independence; they will belong to Scotland because of where they reside geographically. The same goes for the oil fields that are in Scottish waters (as defined by UN law). On the other hand, the infrastructure in London that we spend billions of pounds on each year will be left to the UK – we helped build it while we were together, the net benefit is debatable but the reality is that it will remain post-independence.
As for the international ownership of the resource wealth – that is distributed through employment and shareholder dividends. The rest of the UK will continue to benefit from having an oil rich neighbour as we trade together and also provide much of their energy and water requirements; despite the claims from the No campaign the independence movement is not about ‘isolationist’ – it is about creating a more effective and democratic government system for all constituents on these islands and the wealth that follows will naturally be shared (as we see working so well in the Nordic states).
Interestingly Sir Ian Wood recently proposed that some reforms in the relationship between government and the North Sea oil and gas sector could help tap an extra £200billion of revenue from the North Sea (read more on that here: http://www.heraldscotland.com/news/home-news/oils-new-potential-the-20bn-boon-that-still-lies-offshore.1384185909). Encouragingly for the Yes campaign and the Oil & Gas sector, the Scottish government produced a report titled ‘Maximising the Return from Oil and Gas in an Independent Scotland’ http://www.scotland.gov.uk/Publications/2013/07/5746. As noted in my main blog post, I think a Yes vote provides Scotland a great opportunity to truly expand and diversify our economy – an exciting future of opportunity is there for us to grasp…
Reblogged this on Darling Blogs and commented:
Delighted to receive so many comments on this blog post and to continue discussing the opportunities that we can create with a Yes vote next year… More comments and thoughts will be welcome!
The one thing that worries me about an independent Scotland is that businesses will roar in to strip Scotland of her resources without being properly thought through by a new government. I am especially worried about the gas opportunities here, and whether Scottish businesses will start ‘fracking’, which would be an absolute disaster for the environment. Although it isn’t mentioned in this article, I have my doubts as to the morality of new or ongoing businesses going down the same road as Shell, which will lead to untold misery. Like the Nordic countries, we want to keep our environment pristine, unlike the rest of the UK. We may need to rely on tourism too, so this surely makes sense.
And especially now that Cameron has deregulated the shale gas business it is time to make a stand for Scotland, that this will never be tolerated on this land.
Hi Jill, thanks for the comments and sorry for the slow reply…
I’m not an expert on the fracking business and the regulations around it, but we should certainly expect the government to play a lead role in ensuring that any industry is regulated to ensure that the quality of our environment and resources (such as fresh water) are not unduly compromised. The government should also look at any industry which is based on natural asset and ensure that the economic return to society is maximised.
There was an interesting piece on the current situation in Scotland, and that there appears to be a more cautious approach from the Scottish Government than the Westminster government has taken in England & Wales: http://www.bbc.co.uk/iplayer/episode/b03qggrc/Newsnight_Scotland_14_01_2014/ (the programme was shown on Tuesday the 14th). Worth a watch.
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What will happen with to foreign investment in the industry after a YES vote. Lets say, a smallish UK registered driller based in Aberdeen, which leases out at day rates to E&P companies? Will they need to reincorporate in Scotland? Will they be encouraged to just go away? And what will become of ongoing projects by E&P companies? Will they just be out of luck? What will happen to all that they have invested? Will a new Scotland nationalize all these asserts.
‘Steve in the US – who has recently rewatched the Mel Gibson movie and loses sleep because he finds his painted face quite terrifying.
Hello Steve, thanks for commenting. I’m happy to report that the independence movement in Scotland is one that recognises the importance of global business and in fact wants to ensure there is more effective focus on maximising the return from Oil & Gas. The Scottish Government released a paper that outlines how this would work which you can read here: http://www.scotland.gov.uk/Publications/2013/07/5746
There are no stated plans to nationalise assets, but as I have indicated in the text above I do think there is an opportunity to incrementally introduce a National Oil Company to operations in future licencing discussions. This is an observation from my understanding of Scotland and the industry and not government policy.
Thanks Mr. Darling. I wish the best for everyone in Scotland, and I hope you can find what you want peacefully.
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Stupid question from abroad…when I read statements such as
“We recognise that production and investment have been damaged by
Westminster’s numerous harmful tax changes”
What do they mean by Westminster?
I apologize about my ignorance of UK politics.
No problem Steve, this blog captures that point: http://aye2014.wordpress.com/2014/02/24/oil/
‘Not only have Westminster failed to establish any sort of fund from the proceeds of oil, they have also been responsible for financial instability in the North Sea sector through their continued mismanagement. With 16 fiscal and tax changes in the past 10 years and 14 energy ministers since 1997, there has been no consistency of policy. Again, this shows a lack of long term vision for the oil industry as Westminster has bounced from one parliamentary term to another.’
I am of the opinion that the EOR projects in the North Sea fields are going to extend production quite a bit longer than some of the estimates that are being used in public. However, they are going to be technologically challenging, and expensive. My biggest worry is that the need (or greed) for gov’t revenue will choke off investment. The UK policies only just recently seemed to be catching on to this. I hope administration under an independent Scottish gov’t will recognize this. Contrary to some of the propaganda, I don’t see any reason to think Scotland would do anything to foolish.
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