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  By Martin Kelly
 
Newly published analysis released by the Scottish government predicts that a “renewed oil boom” will lead to an average of £48bn of revenue over the next six years.
 
With over half the wholesale value of the nation’s oil reserves estimated still to be extracted, the Oil and Gas Analytical Bulletin reaffirms Scotland’s position as Europe’s energy capital, the Scottish government has said.

According to the bulletin, the first in a series of analysis by the Scottish Government, Scotland is estimated to be the largest producer of hydrocarbons in the EU, accounting in 2010 for nearly two-thirds (64 per cent) of EU oil production.

Among the main points of the bulletin, it shows that:

  • The oil and gas sector is a key part of the Scottish economy.  It is estimated to contribute around £25 billion to Scottish GDP (onshore and offshore), approximately 17 per cent of the total in 2011. The North Sea oil and gas sector is also a major exporter, boosting the UK balance of payments by £40 billion in 2011.
  • Oil and Gas UK – the industry body – estimate that up to 24 billion barrels of oil and gas equivalent could still be recovered.  These reserves are estimated by the Scottish Government to have a potential wholesale value of up to £1.5 trillion.  This implies that, by wholesale value, more than half of the oil and gas reserves in the UK Continental Shelf (UKCS) could still be extracted.
  • It is estimated that Scotland accounted for 78 per cent of total UK hydrocarbon production in 2011-12.  On an internationally comparable basis Scotland is estimated to have the largest oil reserves in the EU, accounting for nearly 60 per cent of total EU reserves.
  • The latest Oil and Gas UK Activity Survey reports record levels of North Sea investment.  Investment in 2012 was worth £11.4 billion, the highest level for 30 years.  Investment is expected to increase to £13 billion in 2013, while total investment in companies’ plans is estimated to now be worth almost £100 billion.
  • It is estimated that approximately 85 per cent of remaining UK hydrocarbon reserves lie in Scottish waters.  Scotland’s share of estimated oil reserves is thought to be higher still, with in excess of 90 per cent of UK oil reserves believed to be located in Scotland’s share of the UKCS.

Commenting, SNP MSP for Aberdeen South and North Kincardine Maureen Watt said:

“This bulletin, which has been welcomed by Oil and Gas UK, shows that Scotland is projected to see an average £48 billion oil boom in the next six years – a direct result of the record levels of investment in North Sea oil and gas.

“Projected investment will reach £13billion in 2013, whilst total investment in companies’ plans is worth around £100billion.

“There is little doubt that Scotland in moving into a second oil boom, and it will remain an enormous economic resource for many decades to come.

“Scotland’s oil and gas industry has a hugely positive future, which is why we must ensure that its tax revenues are used properly for Scotland's long-term benefit – not sent straight into the pockets of the UK Treasury, which has wasted them over the last 40 years.

“Scotland's finances are consistently stronger than the UK's, over half of the North Sea tax revenues are still to come, and our oil and gas assets are worth up to £1.5 trillion.

“The No campaign is becoming a laughing stock by trying to con Scots into thinking it's better for a Tory Treasury at Westminster to control Scotland's oil tax revenues rather than the people of Scotland ourselves.

“With a Yes vote for independence in 2014 we will have the powers to put future oil revenues to good work in Scotland, and secure our future as Europe’s energy capital.”

The bulletin follows claims by leading Unionist politicians that the analysis over-estimated the amount of revenue that could be generated.

Speaking earlier today before the analysis was published, head of Better Together campaign, Alistair Darling attacked the Scottish government and said: "Their own fiscal commission told them not to over-estimate the value of oil in the long term, yet that is exactly what they are going to do.  What happens if Alex Salmond is wrong? What happens if the price does fall?

"Oil is great for Scotland. However, we know that oil prices go up and down and that one day it will surely run out."

However Mr Darling’s claim that the analysis over-estimated revenue appeared to be contradicted by industry body Oil and Gas UK who today released a statement in which it said:

"The document supports our view that the offshore oil and gas industry is an industry with a future and one worth working hard for.  It occupies an important place in the economy, not just because of the revenues it generates – as highlighted by this document – but also for the jobs it provides, the security of primary energy supply and the business opportunities it presents for companies in the supply chain across the country.”

Commenting this morning, Oil & Gas UK communications director Trisha O’Reilly said: “We welcome the First Minister and Finance Secretary to Aberdeen, the engine of the UK’s oil and gas industry.   While here, they will meet members of the Oil & Gas UK Board to discuss the findings of our own exploration, investment and production survey published at the end of February.  We are currently seeing record investment which should result in oil and gas production rising from 2014 out to 2017, safeguarding hundreds of thousands of jobs, revenues and valuable supplies of primary energy.

“There is a substantial prize still to be won, with up to 24 billion barrels of oil and gas to recover. These barrels will be difficult and expensive to develop and operate, but with cooperation with and between the Scottish and UK governments, and continued innovation and strong stewardship by the industry, we believe it can be done.”

However, other Unionist politicians echoed Mr Darling’s sentiments and attacked the analysis.

Scottish Labour's Richard Baker added: "Last week we found out that in private John Swinney thinks that oil revenues will fall in a separate Scotland, bringing into question the affordability of even the state pension.

"So on Alex Salmond's orders he has spent the weekend cooking the books to come up with an extra £26bn out of thin air.

"The SNP really do think that they can treat the people of Scotland like fools."

The latest forecasts by Oil and Gas UK suggest that production could reach the equivalent of 2 million barrels a day by 2017.  This would represent a 30% increase on current production levels.  Analysis published by Professor Alex Kemp in November 2012 also projected that production could rise in the years to 2017 under a number of different scenarios

In contrast, the Office for Budget Responsibility (OBR) forecast that production will decline by 4% between 2012 and 2017 The analysis by DECC upon which the OBR forecasts are based notes that they incorporate “very significant negative contingencies to the aggregate figures” based on DECC officials’ judgement and past forecast deviations

Such contingencies may explain some of the divergence in the forecasts of production in future years.

Comments  

 
# Will C 2013-03-11 14:39
Richard Baker and "fools", that would be about right!
If people like Baker do not believe the SG and Oil and Gas UK, let them visit Aberdeen and talk to the engineers, the geologists, the drillers, the commercial analysts etc. Tell them to look at the amount of oil related building going on in and around Aberdeen and then tell the people of Scotland that their oil industry is finished! We were told the oil would not last in the early seventies, the eighties, the nineties and beyond. Scotland was robbed once but never again.
 
 
# chicmac 2013-03-11 14:39
I remember reading a reports, at least as far back as last year which stated the Mr Swinney and the Scottish government challenged the OBR prediction for oil revenue.

A prediction which, not only is out of kilter with those of industry experts but also with the UK government's prediction.

They have been accused of misrepresenting Professor Kemps views.

They have also previously basically admitted they are clueless on the subject.

Osborne's OBR has not covered itself with glory in its short career, its predictions have been wildly out.
 
 
# cuckooshoe 2013-03-11 19:27
Quoting chicmac:
I remember reading a reports, at least as far back as last year which stated the Mr Swinney and the Scottish government challenged the OBR prediction for oil revenue.


I read somewhere that the Scottish Government accepted the OBR estimate. Do other countries have volatile oil prices? Is it really a problem? I read somewhere, and I hope someone can check, that oil accounts for something like 12% of Scotland's GDP. While in Norway, oil accounts for something like 30% of its GDP. If it could be shown that the Scottish Government thought the OBR estimate was too low, but accepted them in good faith for the purpose of producing a report, showing the effect of the OBR estimate on Scottish Government Finances, then it could help to mitigate their decision to seek a non-OBR estimate for the future price of oil. I also think Mr Swinney should consider a re-write of the 'leaked' report using the actual price for comparison..
 
 
# Marian 2013-03-11 14:40
"The Labour/Tory/LibDem party really do think that they can treat the people of Scotland like fools" is an infinitely appropriate statement when referring to their ridiculous statements on Scotland's oil.
 
 
# bringiton 2013-03-11 14:40
As a failed finance minster,Alastai r Darling couldn't even get his forecasts right for one year,yet he expects us to be able to do so over a period of 40 - 100 years or more out from present.
He should have been in charge of the ministry of lies and hypocracy.
 
 
# admiral 2013-03-11 15:51
His grasp of economics is tenuous to say the least. To claim that 1) oil is diminishing (not just North Sea, worldwide) and 2) the price may fall substantially is a contradiction. The law of supply and demand says that falling reserves and continuing demand (worldwide, with the BRICS economies needing ever more oil) will mean prices heading in only one direction - upwards!
 
 
# Macart 2013-03-11 14:56
It's a tough one, but I think I'll go with the Oil & Gas industry and the Scottish Governments appraisal of the situation. I fear that Mr Darling's expertise may be somewhat outgunned on this occasion by the fact that everyone else has some background in the industry itself and knows exactly what they're talking about to boot.
 
 
# Independista 2013-03-11 15:06
@ McCart. Indeed. Darling- the man who 'flipped' his residences so many times that it became so complex he hired an accountant at the taxpayers expense to work out how best to maximse his allowances!
Hardly the best man to lecture the Scottish Government on oil revenues!
 
 
# Macart 2013-03-11 16:17
Yep, one of the gentlemen directly responsible for the current strapped finances of UK PLC. Mr Darling is supposedly giving sage council to an administration which has a provably superior record of economic handling to his own and against an industry report put together by the people who kind of ought to know what they're talking about.
 
 
# thejourneyman 2013-03-11 15:29
It really is time for the people of Scotland to step up and all I can say on the matter of whether to believe a mouth piece of the Labour party or not is this, 'Fool us once - shame on you, fool us twice - shame on us!'
 
 
# Big Eye 2013-03-11 16:36
What a bunch of idiots they are, these oil companies who are investing £100 billion in the North Sea, in the face of the sage advice of the all knowing Alistair Darling and Richard Baker.

Wait a minute Darling was responsible for the biggest economic disaster in UK history and Mr Baker has displayed such arithmetical expertise that he got his crime claims so wrong the Labour Party had to hide him from the media for weeks on end!

The woe on us , we are doomed with these billions barrels of volatile priced oil on our doorstep, while we are lucky in the UK to be paying a mere £1.45 a litre for our fuel is not going to wash with the electorate who know prices can vary but whose life experience has shown to be a lot more often up rather than down!
 
 
# mealer 2013-03-11 16:37
Mr Darling....Yesterdays man.
 
 
# RTP 2013-03-11 17:00
Richard Baker.
www.youtube.com/.../

Darling.
Darling ignores calls to back release of secret Devo papers"
I am old enough to remember being told in the late 60s and early 70s that the oil would only last for about 10 years and this from all the scare mongering unionists,my only worry is that people will believe the biased reporting coming from BBC and co.I suppose Brewer will be rubbishing this report tonight.
 
 
# ds12 2013-03-11 17:38
This is the same Richard Baker who when he was justice spokesman for the labour party didn't know how many police forces there were in Scotland.
 
 
# proudscot 2013-03-12 11:36
Quoting ds12:
This is the same Richard Baker who when he was justice spokesman for the labour party didn't know how many police forces there were in Scotland.


Yes ds12, and the same Richard Baker who, in the run up to the 2011 election, stated that knife crime in Scotland was costing us £500,000 a year. Imagine him as finance secretary in a Lamont led Scottish Government. Nightmare scenario, or what?
 
 
# WRH2 2013-03-11 18:20
According to Alastair Darling, "we know that oil prices go up and down and that one day it will surely run out." Well done Alastair, you have just stated the bleeding obvious. And you know what? The sun will one day run out of fuel as well but I don't see that as good reason either for staying tethered to Westminster. Oil revenues will be massively handy to Scotland as a means to improve our country and this time we need to be in a position to have full benefit from it. For the past 40 years the revenues have just been wasted. Trident is a good example of how not to spend money.
 
 
# clootie 2013-03-11 18:33
How can they argue with facts and the physical evidence on show in Aberdeen?

Oil companies are fools and unionists know better - l don't think so!
 
 
# Ready to Start 2013-03-11 18:48
Just watched BBC Scotland TV news coverage first of all they made a ... of the report then when shown did not quote any of the sources that went beyond Alex Salmond's conservative figures but quoted the UK Office of National Statistics and some unknown Bitter Together person and then of all people Tavish Scott on its Shetland's Oil to pour cold water on this good news for Scotland.

No mention of 150 dollars a barrel estimate or that oil could last 100 years with new technology.

Oil and Gas spokespersons will always point out how expensive it is as they are looking for lower taxation.

Compare and contrast this with their trumpeting of the selective figures contained in leaked document last week.
 
 
# Will C 2013-03-11 19:48
The comment that "It's Shetland's oil" from Tavish Scott is to be expected. How these people can live with their conscience is beyond me.
 
 
# Dunnichen685 2013-03-11 20:01
"It's Shetlands oil" states Tavish Scott. I suppose the oil that's been found off the Falkland Islands belongs to the Falklands islanders, not the UK treasury !

Endless negativity, hypocrisy and pro-union bias from bbc Scotland, even accusing Alex Salmond of "cooking the books"

Every night when reporting Scotland comes on I think "what anti independence story are they leading with tonight" ? Journalism ? Don't make me laugh !

Lets put right a 300 year old wrong next year. Vote YES in 2014.
 
 
# Old Smokey 2013-03-11 18:48
This story got the usual negaitive treatment from BBC Reporting Scotland
which even had Jackie Bird actually infer that the oil didnt belong to Scotland ('Its Scotlands Oil' - which can be disputed, was Bird's take on it)
 
 
# cuckooshoe 2013-03-11 19:00
Has the Office for Budget Responsibility and its predecessor ever got a forecast of the future price of Oil and Gas right?

Personally I think the Scottish Government should use the Norwegian figures..
 
 
# call me dave 2013-03-11 18:52
OMG!
Douglas Fraser and Jackie having to report on the SG's predicted oil boom, all be it through gritted teeth. Even a wee bit of 'The First Eck' saying actual words without them being put in his mouth by a BBC reporter. Bonus, no Mr Darling to come on immediately afterwards to splutter indignation and scorn was I dreaming or what.

Better together not count my chickens because by tonight the political spin on Newsnight will tell us all it was a mistake.

@;)
 
 
# clootie 2013-03-11 19:03
BBC Reporting Scotland - I can't believe the level of open bias and distortion now taking place. Every construct is now being used to mislead the public.

I didn't think they would dare go much further but I was wrong - a total disregard of the basic values of good journalism.
 
 
# bringiton 2013-03-11 19:38
clootie,
As I am sure you are aware,this is not about journalism but simply an outlet for anti Scottish propaganda.People will be fed up with all this negativity before the end of the year.
Just let them get on with it.
 
 
# admiral 2013-03-12 12:28
Yes, the open editorialising in what is supposed to be a "news" programme is a disgrace to journalism. These programmes should come with a health warning. At the very least, journalists and news editors at the taxpayer-funded BBC should be required to complete a Register of Political Interests, recording all connections and meetings with political parties and campaign groups. That would at least pander to the concepts of transparency and accountability.
Civil servants are, after all, politically neutral, even if only nominally!
 
 
# From The Suburbs 2013-03-11 19:40
Any balanced report on oil revenues would mention that Westminster has always played down the value of oil and mention McCrone Report for example and according to my father it goes back to 1974 when Andrew Neil appeared on To-morrow's World, a science programme, as an economist to draw a line on a map showing that very little of the oil belonged to Scotland.
 
 
# X_Sticks 2013-03-11 21:59
Hi FtS,

Some of it can be viewed here:

www.youtube.com/.../

Unfortunately the dodgy map isn't shown.
 
 
# From The Suburbs 2013-03-11 22:22
Hi

Phoned father who thinks it was an earlier To-Morrow's World broadcast as he distinctly remembers Andrew Neil in a "trendy" Denim jacket and introduced as an economist complete with his map of the North Sea showing Shetland's share coming down to Aberdeen and England's share going north from Berwick
 
 
# X_Sticks 2013-03-11 22:32
So there was a distinct Tomorrow's world anti-independence slant in more than one episode.

Nothing changed there then. Once a state broadcaster....
 
 
# From The Suburbs 2013-03-11 22:52
What astonished my father at the time was that To-morrow's World was a respected scientific programme with huge audience and he was outraged to see a political slant.
His generation trusted the BBC implicitly.
 
 
# Dee 2013-03-11 20:16
When are the SG going to start shouting from the rooftops regarding all the other oil and gas reserves around the whole of Scotland, on land and in the sea.. We still haven't mentioned the vast reserves in the Atlantic for example. The oil and gas that has till to come out is many times more value than what we have taken out up till now. Come on Alex, get shouting.
 
 
# Marian 2013-03-11 22:50
The "Better Together" "campaign" (if that is what it is) is making a very serious mistake putting all their emphasis on negativity to achieve their aims as it is becoming increasingly evident that people are being completely turned off the "Better Together" message because they have doubts over whether they really do have anything to offer Scotland other than negativity.
 
 
# admiral 2013-03-12 09:16
How true and how very sad for our country!

Their message seems to be "Scotland is rubbish at everything. Scottish people are rubbish at everything. Vote for us and we'll make damn sure it stays that way forever".
 
 
# jinglyjangly 2013-03-11 23:32
Just watched Newsnight, Rennie talking about the SNP changing their mind in a week, How come they can get away with such blatant lies.
Beeb anchor trying his best to pick holes in SNP projections, despite all there efforts, not too much damage
done, appart from my blood pressure!!!!
 
 
# Edulis 2013-03-11 23:34
I have just had the benefit of Alex Kemp, the eminent oil economist, on Newsnicht, rubbish Wullie Rennie's claims that the OBR has been accurate on oil price. Amongst the caveats the sound message was that oil production will go up as a result of the current investment, when the OBR says it will go down. That sounds like another boom in the language of the FM.
 
 
# daveniz 2013-03-12 00:05
had to laugh at the obvious attempt by the BBC to try and undermine the oil projections by using westminsters obr projections but at the same time they couldn't argue with the oil and gas industrys official projections! the BBC tried everything even trying to pick out something so obscure on page 3 of the reports to john swinney who easily batted away everything thrown at him but then we had the typical unionist on after trying to undermine everything said with the BBC journalist agreeing best laugh and obviously what the BBC didn't expect was the economics professer from aberdeen university completey showing Willie rennie and the unionists to be a liars also notice when he did the interuptions started to no avail by the BBC journalist! they simply couldn't find an angle to attack independance or the SNP tonight but they did try though!
 
 
# tartanfever 2013-03-12 00:56
Just reading an astonishing piece on the BBC website.

A UKIP bloke from the North East of England reckons that if the UK voted to leave the EU, it could become like Norway !

bbc.co.uk/.../...

Obviously an independent Scotland couldn't do it because we're....errr...rubbish
 
 
# Old Smokey 2013-03-12 13:53
And comments are allowed on this!
so get in quick before the BBC realise
 
 
# call me dave 2013-03-12 15:49
Surprise!
Actually got past the sign in page with the same password that 'doesn't work' is not recognised on the BBC Scotland site when it is open.

Comment in moderation. Pathetic that it's OK for some and not for others to comment.
Good old BBC

PS: Saw the Falkland referendum with the union flags on the vehicle collecting the ballot papers. What a farce. Is there a sting in the tale somewhere:
Re Orkneys & Shetands being dragged out as a threat and look what we can do if you don't get back in the box.

@:[
 
 
# cynicalHighlander 2013-03-12 18:07
Look at the heading it is under not Scotland or even the UK but England!
 
 
# theycantbeserious 2013-03-12 09:06
It looks like the oil and gas industry are now aware that it is the Scottish Government that they will be talking to in the future. I like it! Yes 2014
 
 
# Dee 2013-03-12 15:29
Surely some dept... In Europe can intervene in this referendum procedure, because when you think about it, EVERY bit of information the public in Scotland gets from MSM is edited by a pro unionist thinking editor/producer..!!!
 
 
# Early Ball 2013-03-12 20:51
Today's P&J surpasses itself on the oil story. It is under the independence great debate banner. The headline is "Shadow over SNP's oil optimism" subtitled yes it the old "Salmond accused" of cooking books". Article has a negative introduction, then a quotes from Salmond, Knife-crime Baker, Rennie, Ruth Davidson and finally Darling.

I do like my local news and the coverage of the Highland League but this article is the final straw. Subscription to be cancelled.

What I do not understand from a marketing point of view is that the readership is largely SNP.

I have not bought a Sunday Post for a year for the same reason.
 
 
# src19 2013-03-13 00:44
They should rename the Sunday Post the Sunday Advertiser full of ads and anti-SNP spin pathetic paper.
 
 
# Dee 2013-03-12 21:42
P n J not part of that Johnston group????
 
 
# redcliffe62 2013-03-13 01:57
I loooked for the headlines in the MSM confirming that Scotland subsidises the UK at this time, and that oil will make Scotand the 3rd richest country in Europe if they became independent and oil prices rose as predicted by everyone except Wastemonster.

Strangely those stories do not seem to be anywhere....

One can assume there are 2 or 3 smear stories already planned for the 2 weeks before the referendum.

Salmond needs to say that there will be a series of debates between himself and Cameron as the national leaders, and a series of debates between Blair and Alistair as leaders of the campaign. And if they are scared to debate the facts on the matter we will turn up and they can have an empty chair representing their position.

Then advise the beeb and STV to make plans for this now, and advise suitable dates to all concerned. Legislate if necessary to make this happen.
 

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