Westminster ‘deliberately downplaying oil revenue’ says investment mag report


  By Martin Kelly
Claims that the Westminster Government is deliberately trying to downplay the value of North Sea Oil, because of the threat of independence, have been made by a leading investment magazine.
A report by Investors Chronicle, part of the Financial Times publishing group, has said that Westminster is deliberately downplaying the potential revenue returns from North Sea Oil and Gas because of September’s independence referendum.

The Investors Chronicle states:

“We think that Westminster has been deliberately downplaying the potential of the UK Continental Shelf (UKCS) ahead of September’s referendum on Scottish independence.

The Department of Energy has certainly been far more subdued than it was at the time of the February publication of Sir Ian Wood’s preliminary findings on the future of offshore oil & gas in the UK.”

According to the report, the UK economy could generate £200bn over the next 20 years through the recovery of only 3-4bn barrels of North Sea oil and gas.

Many analysts believe that the potential is much greater, although energy companies will need to be offered increased tax incentives to stay the course in the North Sea.”

The report will be seen by many as confirmation that UK Government forecasts on the future revenue from the North Sea cannot be trusted. 

It follows a series of increasingly pessimistic forecasts from the London based Office for Budget Responsibility (OBR) that have underpinned claims from Unionist politicians and academic groups that oil revenue will dwindle after independence.

This month the OBR – a body created by Tory Chancellor George Osborne – downgraded its forecast further and claimed that total oil and gas receipts between 2013-14 and 2040-41 will amount to just £39.3bn – a massive £17bn less than it forecast last year when it produced a figure of £56bn, which was itself £11bn less than its previous estimate of £67bn.

Claims that London is deliberately downgrading future revenue receipts is embarrassing to the BBC, which has now adopted a pro-Union stance in its coverage of the independence referendum.  The broadcaster had described the most recent OBR forecasts as a “significant blow” to the Yes campaign.

Commenting on the assessment by the UK’s leading investment magazine, the SNP said it showed Westminster was up to its old tricks again.

SNP MSP Maureen Watt – who represents Aberdeen South and North Kincardine in Scotland’s oil capital – said:

“This is further confirmation that Westminster is up to its old tricks again, as Denis Healey revealed last year. Once again they are being exposed for trying to hoodwink the people of Scotland.”

Last May Former Labour Chancellor of the Exchequer Denis Healey sensationally admitted that his party hid the true worth of Scotland’s oil in the seventies in order to persuade Scots against voting for home rule.
Speaking to Holyrood magazine, the former Cabinet Minister said that the current UK government is “worried stiff” that Scots might vote Yes in the 2014 referendum which will mean Westminster losing billions in tax receipts from North Sea oil.

Ms Watt added: “The oil and gas industry has a bright future ahead of it – and Westminster knows this. There is still more wealth remaining off Scotland’s coast than has been extracted and it is more important than ever that the right decisions are made to make the most of our valuable resources.

“But Westminster has consistently let us down on oil and gas, squandering our resources and downplaying the importance of the industry for more than 40 years – we cannot allow them to waste the next 40 years.

“We only have to look across the water to Norway to see how our oil revenues could have been used – while Norway has an oil fund worth around £500 billion, Scotland has been left with nothing. And as it stands, the UK is alone with Iraq as the only significant oil producers in the world not to have such a fund.

“Westminster does not deserve another chance with our oil – only a Yes vote in September can allow us to establish an oil fund and reap the opportunities we have so long missed out on.”