By a Newsnet reporter
No campaign claims relating to North Sea Oil reserves are coming under increasing pressure following interventions by a leading industry body and respected academics.
A Statement from the UK’s leading offshore industry body giving support to Scottish Government estimates have been bolstered by similar interventions by two leading Professors in Petroleum Accounting and Energy.
Oil and Gas UK has said they “remain of the view that there could be up to 24 billion barrels of oil and gas to recover.” The body issued the statement in response to an attack by Sir Ian Wood on the Scottish Government after it had used the same figure in its estimates.
Now in a separate article in the Scotland on Sunday newspaper, Alex Russell, the Professor of Petroleum Accounting at Robert Gordon University in Aberdeen, and Peter Strachan, Professor of Energy Policy at RGU, have joined criticism of No campaign claims saying figures used to attack independence are an ‘understatement’ and ‘ludicrously pessimistic’.
The respected academics also described the potential of as yet unexplored areas of the North Sea as “a lucrative venture for the oil industry.”
Professors Russell and Strachan added: “Consequently, the healthy 16 billion barrels or so of oil equivalent figures now widely accepted by all campaigners in the referendum debate (apart from the ludicrously pessimistic forecasts from the Office for Budgetary Responsibility) as being economically exploitable from existing discoveries is surely an understatement of the future potential of North Sea production.”
The two academics also backed analysis by oil and gas expert Professor Alex Kemp who only days ago released a statement backing Scottish Government oil estimates. The academic, who is widely accepted to be the foremost voice on oil and gas in the UK, highlighted 125 known existing North Sea discoveries that are not yet considered economic.
Professor Kemp said: “With further technological progress and oil prices higher than current levels it can reasonably be expected that many of these fields will become viable before 2050.
“This should also apply to new discoveries from future exploration. Thus the ultimate potential of 24 billion barrels of oil equivalent foreseen by Oil and Gas UK appears plausible.”
The SNP’s Fergus Ewing has welcomed the interventions from Oil and Gas UK and the three academics.
Commenting Mr Ewing said:
“As we have always said Scottish Government oil reserve figures are based on industry figures, and thus I welcome Oil and Gas UK’s confirmation that they stand by their original estimate that reserves could be up to 24 billion barrels.
“Coming on the back of a similar statement by leading oil and gas academic Professor Alex Kemp, and a new article by Professor’s Russell and Strachan of Aberdeen’s Robert Gordon University, it is clear that North Sea reserves remain substantial.
“That a leading Professor in Petroleum Accounting also believes that the OBR’s forecasts are ‘ludicrously pessimistic’’, also shows that the OBR statistics now have no credibility whatsoever.”
Forecasts by the OBR [Office of Budgetary Responsibility], which was set up by Tory Chancellor George Osborne, have underpinned several academic reports and claims by opponents of independence. The body has repeatedly downgraded its estimates of North Sea oil and gas revenue several times over the past twelve months.
Mr Ewing added: “What is important both for the industry and for public finances is to bring an end to the Westminster mismanagement of the oil and gas tax regime, which has brought in sudden and unpredicted changes in taxation affecting the system – causing uncertainty and damaging any remaining reputation the UK had for good stewardship of Scotland’s oil wealth.
“The 2011 hike in the supplementary charge is the most infamous example, but even this year sudden changes to the fiscal rules affecting the industry have caused great concern.
“Furthermore, in stark contrast to Norway, whose oil fund now sits at over £500 billion and is so large that it is buying up chunks of central London, successive Westminster Governments have squandered Scotland’s oil, with funds instead helping the Treasury finance nuclear weapons, illegal wars and the House of Lords. A Yes vote on September 18th gives Scotland the opportunity to change that forever.”
Meanwhile anger is mounting over the refusal of the BBC to report the statements from Oil and Gas UK and the academics in the same manner in which it covered the interview by Sir Ian Wood.
Last week Sir Ian’s intervention was given blanket coverage across BBC Scotland platforms, appearing on Newsdrive, Good Morning Scotland, Reporting Scotland and BBC online. It was also covered on the afternoon John Beattie programme, on BBC2 Scotland Politics programme and the late evening Scotland 2014 with Sarah Smith.