A newly published report, by Energy Minister Fergus Ewing, comparing Scotland and Norways experience since the discovery of North Sea Oil, has highlighted the mismanagement of the resource in the UK and the opportunities with independence.
The UK and Norway both began extracting oil and gas from the North Sea in the early 1970’s. While both countries are amongst the largest oil producers in Europe, there are some interesting differences in their approach and economic performance:
• In 1970, levels of GDP per capita in Norway were 7.5 per cent lower than in the UK. By 2013, GDP per capita in Norway was over 80 per cent higher than the UK.
• Norway is ranked top of the UN Human Development Index in 2014, a measure of standards of living. The UK was 14th in the UN HDI rankings.
• Norway has established an oil fund that is now worth over £500 billion, equivalent to £100,000 for every Norwegian citizen. This is something that successive UK Governments have failed to do.
With independence, the Scottish Government has said Scotland would have a second opportunity to steward its oil and gas assets for the benefit of the nation, as well as supporting the growth of an industry that in many areas is the best in the world.
Commenting on the new report “North Sea – Two Futures” Mr Ewing said:
“Norway is a great example of how, by fostering a stable and predictable fiscal and regulatory regime, a resource rich nation can not only develop a very strong oil and gas sector, but through the development of an oil fund use its energy wealth to benefit the whole country.
“Unlike Norway, the UK Government has been missing the point – formulating policy based on short-term gain instead of focusing on the long-term impact upon value generation, and the need to sustain investment in all areas of the oil and gas industry.
“There is no doubt that as part of the UK we have so far lost out on the very real benefits that an independent country can secure. For example, Norway has established an oil fund that is worth over £500 billion – equivalent to £100,000 for every Norwegian citizen. While over the same period the UK Government has accumulated £1.3 trillion of public sector net debt.
“Poor stewardship of resources, frequent changes to the tax regime, a lack of focus on value creation and mismanagement of revenues are all mistakes that we cannot let happen again, and which an Independent Scotland will address.
“In value terms half the wealth from Scotland’s oil remains and it is imperative that Scotland does not allow the same mistakes to continue. By grabbing the independence opportunity next month we can emulate Norway’s example, instead of putting up with yet more mismanagement and poor stewardship of this vital resource.”