Oil and Gas

‘Scottish oil bonanza for a century’ confirms think-tank

Written by Michael Gray

BuNanyjIgAAJRg_The trickle of speculation relating to new offshore revenue for Scotland has turned into a stream of hard facts from figures across the oil industry, with even a UK Government source describing new finds as “enormous”.

Yesterday Business for Scotland covered reports by Oil and Gas People on oil expansion in Scotland’s Atlantic waters. The report said new resources were a £1 trillion asset that would last 100 years.

Today business think-tank N-56 has released a substantial report that agrees with these positive assessments. Their release is entitled ‘Scotland set for oil bonanza that herald a new golden age for the North Sea lasting for another century‘.

Expert analysis concluded that:

– £300 billion in additional tax revenue is estimated from the North Sea.

– 24 billion barrels of oil have been identified.

– Oil and gas from the Upper Jurassic Kimmeridge Clay formation could add a substantial 21 billion further barrels.

– This means that total tax take would reach a “staggering £665 billion”, which is more than double the take so far.

– A senior official with the UK Department of Energy and Climate Change back this “enormous” potential, while the Office for Budget Responsibility estimates only £57 billion in revenue.

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An independent Scotland will be one of the wealthiest nations in the world

This report is another substantial boost to analysts considering Scotland’s financial future. Westminster has sought to downplay Scotland’s oil sector for decades. This report, however, includes a government source stating the opposite.

A senior official within DECC (Department of Energy and Climate Change) said that new technology “could potentially be an enormous new play for the New Sea.”

The implications of these new development are substantial for the industry.

Martyn Tulloch of Tulloch Energy said:

“The prize available to the UK or Scottish Government through unconventional oil and gas could be colossal and as a nation we could be sitting on a fortune of black gold that will last for another century, well after conventional oil and gas runs out.  Should the proposal outlined in Denver prove to be viable, then we must grab the opportunity it presents with both hands, prolonging the life of the North Sea as well as creating an oil fund on the scale of the Norwegian oil fund, to serve both this and future generations.”

Graeme Blackett from Biggar Economics said:

“Scotland’s public finances would be given a colossal boost through access to these new oil and gas reserves. These finds are reminiscent of the early North Sea discoveries from over 40 years ago, such as the Brent Field, and would propel Scotland towards the top of the global league table in terms of oil and gas production.”

Growing activity in the North Sea and West of Shetland is proof that the offshore sector is set for a further expansion. With exactly two weeks ’til the referendum on independence, any idea that the vast bonus of offshore oil would be a limited one for Scotland has been rubbished by industry experts.

£665 billion in tax revenue would make Scotland one of the wealthiest countries in the world. A Yes vote allows this wealth to be invested in Scotland’s future.

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About the author

Michael Gray

Michael is Head of Research with Business for Scotland.

A graduate from the University of Glasgow, he has carried out a series of interviews with academics, politicians and the public in Denmark, Iceland and Ireland. Michael's on twitter @GrayInGlasgow.

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