Labour MP urged to admit mistake after claiming only fraction of oil remaining

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  By Martin Kelly
 
A Labour MP who claimed North Sea oil reserves were just a twelfth of what the industry has estimated has been accused of talking down Scotland’s oil sector.
 
Tom Greatrex has been urged to publicly accept he was wrong after he told the BBC that there was just two billion barrels of oil left in the North Sea.

Speaking on Radio Scotland, the MP for Hamilton said the 24 billion barrels of oil equivalent cited by the Scottish Government as the upper estimate of remaining reserves, was an exaggeration.

Mr Greatrex claimed the SNP had exaggerated reserves and rushed out figures of 24 billion barrels of oil which he said, “is more than 12 times the ONS estimate of the remaining value of UK oil and gas reserves”.

However, according to industry group UK Oil & Gas in its most recent economic report, there are between 15 and 24 billion boe remaining – a figure also contained in the UK Government’s own oil and gas industry strategy paper published last year.

The comments from the Labour MP has prompted a letter from SNP MSP Marco Biagi calling on Mr Greatrex to publicly acknowledge that he was wrong and accusing him of not having helped the industry.

In the letter Mr Biagi writes: “I am unaware of the ONS having ever estimated that there are just two billion boe remaining and would be fascinated to know the basis for your claim.

“Given that the 24 billion boe figure is one that is accepted by the UK Government, the Scottish Government and the industry itself, I believe it does the oil and gas sector no favours to have the shadow Energy Minister talk down the oil and gas industry in the way you did earlier today.”

The letter continues: “If you are unable to back up your claim regarding the ONS figures, then I believe the only responsible thing for you to do would be to publicly accept the figure used by the Scottish Government and acknowledge that the oil and gas sector has a substantially brighter future ahead of it than the picture you painted this morning.”

In a public statement, Mr Biagi, who sits on the Scottish Parliament’s Economy, Energy and Tourism Committee said:

“This woeful underestimate of the oil and gas reserves remaining in the waters off our coast is one that Alistair Darling previously faced ridicule for peddling on previous occasions.

“Why is it that the No campaign are so determined to do their best to talk down the oil and gas sector?”

The claims from Mr Greatrex are similar to comments made by the leader of the Better Together campaign, Alistair Darling who last year told the BBC that the figure used by the Scottish Government was “12 times what the independent experts say”.  Mr Darling attacked the  Scottish Government figures despite having himself said, in 2007, that “there are potentially more than 20 billion barrels of oil and gas still available”.

Mr Biagi continued: “The industry’s own estimated estimate that there are up to 24 billion barrels of oil equivalent remaining – which equates to a wholesale value of £1.5 trillion.

“But successive Westminster governments have squandered our oil wealth – and with Tom Greatrex Labour’s next choice for Energy Minister, the waste looks set to continue no matter which party is in power. Only a Yes vote in September will give Scotland a second chance to invest oil and gas for the benefit of the nation.

“I have written to him today pointing out the total error in what he stated on the radio this morning and have called on him to set the record straight by accepting the oil and gas industry’s estimates.”

This week saw industry bodies react angrily to plans by UK Chancellor George Osborne to introduce a new tax hike that would cost the offshore industry one billion pounds.

According to the Press and Journal newspaper, the Tory Chancellor is set to introduce a tax hike on vessels and rigs in a move which industry chiefs have warned could destabilise the offshore sector, hitting investment and jobs.

Head of Oil and Gas UK, Malcolm Webb responded to the proposals, saying: “we strongly urge this proposed measure, announced in the recent autumn Statement, be withdrawn due to the serious adverse impact it will have on investor confidence.”