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  By Martin Kelly
 
The oil and gas sector has the potential to boost the economy by as much as £200bn over the next twenty years according to a former oil tycoon.
 
In a report published today (Monday 11 Nov) Sir Ian Wood has concluded that a new regulatory body, based on those from neighbouring oil producing countries such as Norway, should be set up in order to boost collaboration and increase efficiency.

Sir Ian's report estimates that the prize from increased and effective collaboration could be an additional 3-4 billion barrels of oil equivalent over 20 years, which could be worth £200 billion.

The former Head of the Wood Group said: "The evidence is clear.  We need to strengthen the capacity and capability of our stewardship regime to enhance collaboration significantly across the North Sea if we are to meet the challenging demands of maturity and diversity and maximise the economic benefits for both the country and the industry."

Sir Ian said it was "essential" for the prosperity of the UK that recovery of North Sea oil and gas was maximised and added: "It is therefore crucial that industry and government act now to invest in this shared vision if they are to achieve these goals.

"Subject to feedback, I will be urging DECC and government to implement the main recommendations on a fast track programme".

According to Sir Ian's report, future licences for oil and gas developments should include a clause "making clear that in all areas of development and operation, the licence holder must act in such a way that would be consistent with the principle of maximising economic recovery".

The report was welcomed by Scotland’s Energy Minister, Fergus Ewing, who said:

"Sir Ian Wood’s Interim Report suggests that a new regulatory body is needed in order to achieve the massive prize of maximising economic recovery of oil and gas.  The Scottish Government are fully behind Sir Ian Wood’s report.  We believe it is essential that the recommendations are implemented with speed, and a shadow body be set up rather than await the outcome of primary legislation.

"We share Sir Ian's view that the industry should finance this body, and since most of the developments in the North Sea and west of Shetland are managed from Aberdeen, Europe’s Oil and Gas capital, we believe the only conceivable principal location for the new regulatory body is in Aberdeen."

Highlighting the damage caused to the industry in 2011 when UK Chancellor George Osborne announced a surprise tax raid on the sector, Mr Ewing added:

"Sir Ian's report also notes that fiscal instability has been a significant factor in basin underperformance.  The Scottish Government have appointed an Independent Expert Commission on Oil and Gas, chaired by Melfort Campbell. 

"The commission will consider specific proposals for providing long-term fiscal stability and predictability for the oil and gas industry, and will also make recommendations for the regulatory and licensing regimes."

Labour's Shadow energy minister Tom Greatrex said Sir Ian's report "rightly calls attention to the need for cooperation and wider consultation in order to get the most from the remaining resources in the North Sea".

However the Labour MP also mounted an attack on independence, adding: "Oil is by definition a declining resource and by record a volatile one, so care and attention is required.

"Given the global nature of this business, fragmentation of fiscal and regulatory regimes through separate arrangements in Scotland from the rest of the UK would increase risk, reduce efficiency and minimise the chances of achieving the goals this interim report sets.

"This interim report and the subsequent full report will be important factors to consider as industry, workforce and Government collaborate for the future of an important sector in the Scottish and UK economies."

The oil sector has been a central feature of the independence debate with the UK and Scottish Government’s disagreeing over the potential revenue still remaining.

Westminster claims that North Sea oil revenue will begin dropping after 2014 and would not be a reliable source for an independent Scotland's economy.  

The Office of Budget Responsibility (OBR), set up by Tory Chancellor George Osborne, has claimed oil and gas will generate £33bn up to and including financial year 2017/18.  This is around £9bn lower than the Scottish Government's own cautious estimate, which forecast £42bn.

The Scottish government claims that there still exists £1.5 trillion of oil to be extracted from the North Sea.  However a recent study, based on OECD figures, suggested that improvements in technology meant that there could be as much as £4 trillion of oil and gas left in Scottish waters.

Comments  

 
# Henderson 2013-11-11 21:05
As Tom Greatrex and Scottish Labour say say - Oil bad for Scotland, UK good

Remember this fact Scots - Oil bad - UK good.

More from fear factor later.

Jesus; BT what a pathetic excuse for Scots, sorry 'Proud Scots'.
 
 
# Leswil 2013-11-11 21:09
Aye, and Westminster will do anythingto get their sticky hands all over it.
 
 
# call me dave 2013-11-11 21:14
Articles like this illustrate how much potential there is for an independent Scotland. In addition it's all about trust in whose numbers you believe. Take the great West coast oil cover up story that finally got some MSM coverage on Sunday, but none on BBC radio that I've heard.

Here is another excellent contribution that implies that Darling is the unions 'Weapon of Math Destruction'

archive.is/T7PUs
 
 
# bringiton 2013-11-11 21:51
This is just what might be expected from North Sea oil reserves.
Nobody is saying much about the potential reserves from the Atlantic margins (which is very definitely not in decline).
As for the Labour man's statement about oil reserves needing care and attention,he is absolutely correct.
Which is why we need to get Westminster's spendthrift fingers as far away from it as possible.
Their response to the several economic catastrophies which they have created has been to diminish this valuable resource as quickly as possible in order to pay off their debts.
Scotland's resources being used to prop up failed Thatcherite economic policies and in return we get Westminster's austerity.
Not a good bargain for us.
 
 
# springster 2013-11-11 21:54
Douglas Fraser has an online article on this subject, and as ever with Douglas he just can't bring himself to admit it is a boost for the Yes campaign.

Here is how he ends his very lengthy piece:

"I could find no mention of the independence debate in Sir Ian Wood's paper, just as I have heard little critique from nationalists of the way the Whitehall licensing regime has operated (as opposed to the tax regime).

But all the same issues would apply to an independent Scotland. It could be an opportunity to set up more robust regulation, if Whitehall flunks Sir Ian's test.

But ask yourself this question: would Scotland be in a better negotiating position to make demands of the offshore producers, or would they need them even more than Whitehall continues to do?"


Roll on a Yes vote and let's have no more from the likes of this guy.
 
 
# From The Suburbs 2013-11-11 22:18
Its our geographic share of an additional £200 billion to the £1500 billion forecast by Scottish Government.

And don't forget all the Gas coming from the West Coast from the middle of next year.

shetlandtimes.co.uk/.../...
 
 
# fynesider 2013-11-11 22:31
".. the Labour MP also mounted an attack on independence, adding: "Oil is by definition a declining resource and by record a volatile one, so care and attention is required."

If Tom Greatorex is correct then we definitely need to keep Westminster as far away from this as possible.
 
 
# dtr 2013-11-11 22:34
"The oil and gas sector has the potential to boost the economy by as much as £200bn over the next twenty years"

...which will be used to fund the continued breakup of organised labour moving the resultant unemployed into subsistence level conditions where they will subsequently be attacked as scroungers and cheats. The idea of establishing an 'oil fund' was described as 'preposterous' when pissing it up the wall gave quicker gratification.
 
 
# theycantbeserious 2013-11-11 23:00
Bloody hell! more oil and gas...more volatility, more uncertainty and more risk! This is more than one country can take. Why oh why do we keep getting punished with an abundance of natural resources. Is there anybody out there that can help us? Please take it away and let us get back the important things in life, the day to day choices like....whether to eat and be cold or whether to heat the house and be hungry? Could always go to the food bank(I hope they have food that you don't have to heat cause I can't afford the additional electricity cost). Will the bailiff be round to seize my goods for the rent arrears on my second bedroom? Just another day in too wee, too poor, too stupid Scotland!

Wake up Scotland and Vote YES
 
 
# creigs1707repeal 2013-11-11 23:30
Indeed, North Sea Oil is a finite resource that will one day run dry (notwithstandin g all the potential new fields in the west of Scotland. And it is precisely because NSO is a finite resource that makes it absolutely imperative that Scotland votes YES in order to take control of this finite resource in order that it is managed in a proper and considered manner instead of being squandered by successive Westminster Governments. After all, if Scotland votes 'No' in the referndum then one thing is absolutely certain--when the oil DOES run dry, Scotland and its people will be given independence whether we want it or not. We MUST choose independence on our terms, when there is still something of the North Sea with which to build a long-term future just as Norway has done. Do not wait until it is too late.

YES Scotland.
 
 
# clootie 2013-11-11 23:38
We will never win the YES vote if we keep finding mair o' that black stuff.

I'm quite sure Sir Ian Wood was addressing his remarks to Westminster but anyone with an ounce of sense can see the logic of a YES vote in this scenario. It simply comes down to who would you trust most to execute a plan in which Scotland benefits.
 
 
# Caledonia 2013-11-12 00:22
"Fragmenting" the UK will be a risk eh?
When Oil companies, more than any other, are used to working in Iraq, Angola and war zones.
 
 
# Saltire Groppenslosh 2013-11-12 09:27
What about the oil waiting for us in the Firth of Clyde?

Chic Brodie MSP led a team to extract the now declassified documents at the National Archive which prove that the MOD blocked an oil boom on the Clyde back in the 1980's because it would "interfere" with subs entering the Clyde.

The economic implications are mind bending and if the oil extraction had been "allowed", instead of carping about the BAE shipyard as we are today, the Clyde would still have had many shipyards operating in support of that oil boom.

The only silver lining for the people of Glasgow and the Firth of Clyde is that the oil is still there.

The news was broken in last weeks Sunday Post. This story will start to grow arms and legs. Bad news for the unionists.
 
 
# Dundonian West 2013-11-12 11:20
Quote:
"Labour's Shadow energy minister Tom Greatrex said Sir Ian's report "rightly calls attention to the need for cooperation and wider consultation in order to get the most from the remaining resources in the North Sea".
Quite right Mr Greatrex---an independent Scotland will cooperate and consult!
End of.
 
 
# bringiton 2013-11-12 11:52
Our partner in this so called "union" of ours has a long history of spending today and forgetting about tomorrow.
I am sure we all know people like this.
Scots,tradition ally,have always tried to put away something for a rainy day,although through Westminster's austerity programme and near zero interest rates on savings policies has discouraged that activity.
The No campaign are correct in that if we were to continue with Westminster policies,we would also go from boom to bust depending on oil prices.
But,if we are sensible and resort to our time honoured practices,we can put away some of that income for rainy days.
This is what an oil fund is for...not instant gratification but long term stability so that we can protect public services during hard times.
The state,during hard times,should be supporting people and not punishing them for it's failures.
It's our choice,Westmins ter's way or ours.
 
 
# The Tree of Liberty 2013-11-12 12:41
20 years! Naw, naw, naw, this canny be right, Alistair telt us the oil would be done by 2017!
 
 
# admiral 2013-11-12 12:53
We got told in the 1970s that the oil would be done by 1980!

Plus ca change...

The No campaign must be the jammiest political campaign ever, they just have to resurrect and recycle the old myths and lies.
 

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