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  By Martin Kelly
 
Scotland is sitting on oil and gas revenues worth up to £4 trillion according to a new report set to be published this week.
 
The David Hume Institute, a highly respected non-partisan body, will this week present analysis which will show that current estimates on the amount of revenue still to be generated by the North Sea have been massively underestimated.

The report is based on figures by economists at the Paris based Organisation for Economic Co-operation and Development (OECD) who have forecast  that the price of a barrel of oil will rise to between $150 and $270 throughout the coming decade.

The OECD envisages a baseline value for a barrel of oil of $190 which, the new report will say, will lead to an independent Scotland benefiting to the tune of between £2.25 trillion and £4 trillion.

The figures are higher than the $100 per barrel used by the Scottish government in its own analysis which suggested around £1.5 trillion of revenue would be generated from the Scottish oil and gas sector.

Unionists have claimed that the price ranges for a barrel of oil would be a problem for an independent Scotland and that the Scottish economy would be at risk from an over-reliance on the resource.  However figures have shown that a newly independent Scotland would rely less on its oil and gas sector than Norway.

The Scottish government has also claimed that a newly independent Scotland would eventually be able to establish an oil fund similar to the Norwegians which would allow future generations to benefit from the finite resource.

In a statement, the official anti-independence campaign Better Together said: "This report shows the volatility of oil prices.  Some people say the price could be as low as $90, some say it could be as high as $270.  No one knows, so why would you want to gamble?"

News of the new report was welcomed by the SNP SNP Treasury spokesman spokesman Stewart Hosie who ridiculed claims by Unionists that oil would be a problem for an independent Scotland and claimed the only debate now was the scale of the financial benefits that would accrue to Scotland. 

Mr Hosie commented: "The absurd case that the No campaign are trying to put across is that it would be some kind of a problem for Scotland to have access to the wealth of our oil and gas resources – but absolutely fine for Westminster to keep control, even though successive UK governments have squandered the revenue. 

"In fact even without oil and gas, Scotland’s economic output per head is the same as the UK’s – which means that our North Sea resources are a massive bonus.

"As these figures indicate, the only debate is the sheer scale of that bonus.  With over half of the revenue from the North Sea still to flow, and the industry entering a new boom, it is vital that Scotland gets the benefit this time round."

The latest forecasts by Oil and Gas UK suggest that production could reach the equivalent of 2 million barrels a day by 2017.  This would represent a 30% increase on current production levels.  Analysis published by Professor Alex Kemp in November 2012 also projected that production could rise in the years to 2017 under a number of different scenarios

In contrast, the UK Government's Office for Budget Responsibility (OBR) forecast that production will decline by 4% between 2012 and 2017 The analysis by DECC upon which the OBR forecasts are based notes that they incorporate "very significant negative contingencies to the aggregate figures" based on DECC officials’ judgement and past forecast deviations.

Speaking to Newsnet Scotland in December, Professor Kemp challenged the OBR forecasts and said: "The OBR's combination of low production estimates with low price estimates is pessimistic compared with other predictions including our own."

The new report from the David Hume Institute coincides with newly published figures that show the oil and gas industry supply chain has just recorded record sales.

Latest figures from the annual oil and gas survey of international activity show a 5.8 per cent increase in total sales from the sector to reach £17.2 billion, with international sales rising by 8.4 per cent in 2011-12, reaching a record 47.6 per cent of total sales. 

Scottish companies now operate in over 100 markets across the world.

Combined UK and International sales figures show overall growth for the 14th year in a row, and come as Scotland’s Energy Minister, Fergus Ewing, travels to take part in the Offshore Technology Conference in Houston, Texas, where he will lead a trade delegation of over 50 Scottish companies working in the oil and gas services sector.

Commenting on the new figures, Mr Ewing said:

"Scotland has established a global reputation within the oil and gas sector and I am delighted that these latest figures show an increase in international sales, which now account for almost 50 per cent of total sales.

"The value of this activity to the economy and exchequer is substantial.  International sales by Scotland’s oil and gas supply chain rose by 8.4 per cent in 2011-12, to £8.2 billion – almost double the growth from the previous year.

"Scotland is leading the way in the world of oil and gas and has a clear competitive advantage in this truly global industry.  There are huge opportunities open to us internationally and we are determined to make the most of them.

"The Scottish Government recognises the substantial contribution that the oil and gas industry makes to our economy. We are working with the industry to continue to strengthen Scotland’s position as a global leader in the sector and these figures mark further growth in this important part of our economy."

Strongest growth was reported in the Middle East, but the African region remained the second most important with a 5.9 per cent increase in sales.  Brazil, the USA and Australia were new markets of the greatest interest – with sales in Australia alone increasing by 9.4 per cent.

North America remained the top region for international sales with £2.6 billion of sales targeted into this region, an increase of 2.8 per cent since 2010.

The figures are from the latest annual survey of international activity in the sector from Scottish Enterprise and the Scottish Council for Development and Industry (SCDI).

Welcoming the results, David Rennie, Scottish Enterprise’s international head of oil & gas said:

"Growing export levels is a key priority in Scotland’s industry-led Oil & Gas Strategy, because we know that this type of activity has the potential to make the biggest impact on Scotland’s long-term economic growth.

"These latest figures are outstanding, particularly at a time when many regional economies have been stagnating.  They show that our expertise in oil & gas is in increasing demand across the globe, and clearly demonstrate the growing importance international markets have to play in the long-term future of the industry in Scotland.

"We’ll continue to work closely with companies across the oil & gas supply chain to help identify new opportunities for growth at a global level, particularly in our priority markets such as West Africa, the Middle East, Australia and Brazil."

Ian Armstrong regional director, Scottish Council for Development and Industry, added:

"The global nature of Scotland’s oil and gas supply chain is once again illustrated by this latest set of figures.

"The international expertise and success of the industry is built on outward looking and innovative companies based in the North East, Highlands & Islands and other parts of our country, who consistently proved themselves to be world leading in identifying and capitalising upon business opportunities in  oil and gas provinces around the world.

"As energy expertise in Scotland continues to build across other sectors, SCDI anticipates this trend will continue to benefit Scotland for many decades to come."

Comments  

 
# Diabloandco 2013-05-05 13:09
Oh goodness ! How will we manage ?
Maybe we should just give it away quickly before it becomes too big for us to deal with .
Wonder who would be better placed to look after that huge revenue, of using it wisely and for the benefit of the people??
How many Tridents would it purchase I wonder - awfully necessary I'm told to secure the safety of those in London.
Gee ! it makes me feel too wee and too stupid.
 
 
# UpSpake 2013-05-05 13:17
Now Israel is bombing Syria, its a short step to them taking out Iran's nuclear weapons capability.
Price of oil (Brent Crude) today $104 a barrel. Price then $250 a barrel and at 60% tax on petrol, watch Scotland shut down as it can't afford its oil products any more than it could afford its own electricity.
You couldn't make it up could you ?. Well, unless you were Better Together - Not!.
 
 
# call me dave 2013-05-05 14:13
Volatile!

airy, buoyant, capricious, effervescent, elastic, elusive, ephemeral, erratic, expansive, fickle, fleeting, flighty, flippant, frivolous, fugacious, fugitive, gaseous, gay, giddy, impermanent, imponderable, inconsistent, inconstant, light, lively, lubricious, mercurial, momentary, playful, resilient, short-lived, sprightly, subtle, temperamental, ticklish, transient, transitory, unsettled, unstable, unsteady, up-and-down, vaporous, variable, whimsical

I don't care how it's described as long as
we don't piss it away on sabre rattling interventions in other countries and the likes of trident.

Use it to support Scotland through the early years of independence, re-balance our society and invest in work and make sure we salt some away for our children's children in the future.
Roll on 2014.
 
 
# Will C 2013-05-05 14:13
This report could be a real game changer in the referendum debate. We really must get this news out to the Scottish public. The unionists have been telling us that our oil has been running out since it was discovered. Time to alert the people of Scotland that an independent Scotland will be an oil rich Scotland.
 
 
# Sannymac 2013-05-05 14:24
Whilst I am delighted at the figures of this latest report but I am not surprised. I spent a significant part of my working life in the O&G Industry. When I retired in 1994 I was aware then that the so-called O&G reserves were being grossly under reported by the Industry - to preserve there tax positions.
Back in the 70's there was a proposal by a Labour MP to set up Scot Oil to monitor and sell the oil but this was thrown into touch by other Labourites and of course by Thatcher. Thatcher used the wealth of Scotlands Oil to prevent London and the SE going down the pan of bankruptcy.
Why are Scots not aware of all of this. It is clearly stated in the McCrone report of 1975.
WAKE-UP SCOTLAND!!!
 
 
# Alan 2013-05-05 14:52
Better Together seem to emphasise the volatility of oil prices and point out that the Scottish economy would be at risk from an over-reliance on the resource, claiming independence would be a gamble based on the future price of oil. If Scotland remains in the UK, will the UK promise to subsidise the standard of living in Scotland if the price of oil drops? If not, Scotland would have nothing to loose by becoming independent.
 
 
# Davy 2013-05-05 15:22
Dearie me, not more money from that black rubbish, what the hell will we do with it ?????
 
 
# Highland Eagle 2013-05-05 15:33
How will Bitter Together spin this one?

Having all this wealth is extremely bad for the people of Scotland but for the people of the UK it is a godsend!!

Let's all laugh at them as they attempt to negate another positive case for Indy!!
 
 
# cuckooshoe 2013-05-05 16:27
"In a statement, the official anti-independence campaign Better Together said: "This report shows the volatility of oil prices. Some people say the price could be as low as $90, some say it could be as high as $270. No one knows, so why would you want to gamble?""

Having oil is a bonus not a gamble..
 
 
# hetty 2013-05-05 16:30
Great news indeed. Ive had undecided friends say that 'oil is no a clean energy though is it'.
That's from those who are usually not that bothered about the environment or particularly the future of the planet! Another friend told me that the gas man (!) came to fix the boiler said, 'aye, but it's not Scotland's oil is it, it belongs to Norway'. So, what to do?
I can only say, well would you rather the money from these industries was spent on weapons? Or wars, and London and it's well funded galleries, museums, opera houses,undergro und, High speed trains and such things, or, would you rather it was spent in Scotland on the people, on things, god forbid, like improving infrastructure, investing in clean energy, the environment, on a balanced and broad spectrum education for all, housing stock, health, welfare for the poor and disabled, even investing in the future? Or is that a tad problematic for us, too wee, too poor, too stupid?
I don't think so!
 
 
# RTP 2013-05-05 16:46
Episode 430
May I suggest you all listen to this Keiser Report and hear where all the oil money has went,RT.com
 
 
# maisiedotts 2013-05-05 17:05
 
 
# RTP 2013-05-05 18:02
Quoting maisiedotts:
www.youtube.com/.../

Thanks maisi. I'm not to up to the links.
 
 
# Briggs 2013-05-05 17:00
"In a statement, the official anti-independence campaign Better Together said: "This report shows the volatility of oil prices. Some people say the price could be as low as $90, some say it could be as high as $270. No one knows, so why would you want to gamble?"

Where can I place a bet? .... apart from the ballot box next year.
 
 
# Leader of the Pack 2013-05-05 17:41
"Some people say the price could be as low as $90, some say it could be as high as $270. No one knows, so why would you want to gamble?"

When Scotlands base line profit value of NS oil and gas revenue is ZERO within the union then to suggest the above analysis is detrimental in comparrison highlights how utterly ludicrous the posiion the No campaign finds itself in trying to discredit a globaly recognised natural bounty which only encourages envy from those who are unfortunate enough not to have their own access to. The UK Government gloats publically of its control and access to this bounty while simutainiously trying to play it down as a boon to Scotland. It is truly sickening to listen to the utter contempt and derision the No campaign clearly has for the people of Scotland by the sheer moronic value of their scaremongering. I would feel less insulted if the scaremongering was at least intelligent and plausible and not the work of imbeciles.
 
 
# KillieBoab 2013-05-05 17:50
Better Together said: "This report shows the volatility of oil prices. Some people say the price could be as low as $90, some say it could be as high as $270. No one knows, so why would you want to gamble?"

That looks straight-forward enough. The Scottish government budget on a price of $90 and put everything over that into an 'Oil Fund'.

Sorted! No volatility whatsoever.
 
 
# proudscot 2013-05-05 18:10
This Thursday's FMQs should be interesting. I wonder how Lamont, Davidson and Rennie will try to put their usual negative spin on this news from the OECD?

For that matter, will the Treasury double act of Osborne and Alexander continue to threaten to refuse cooperation in a sterling zone with an independent (oil rich) Scotland?
 
 
# Macart 2013-05-05 19:59
Ooohhhh Nooooo! How will we cope? Do we have calculators with enough buttons? Can the Hume Institute report and the OECD be trusted for accuracy as opposed to that paragon of numbers the OBR?

I suppose we'll just have to struggle through. Westminster has carried the burden of that bothersome, volatile resource for far too long. We couldn't possibly ask them to shoulder the responsibility any longer.
 
 
# clootie 2013-05-05 22:51
We need to get rid of this stuff before it ruins us - has anyone tried burning it?
 
 
# Macart 2013-05-06 05:59
Or we could refine it into pure crude moolah and store the stuff safely in a vault. Y'know just to keep it safe like.
 
 
# samizdat 2013-05-05 20:46
Too wee,too poor,too stupid,
Well we know we were never too wee and its been confirmed yet again that we are far from poor.
So that leaves too stupid.
Well watch this space,
That question will be answered in 500 days.
 
 
# MAcandroid 2013-05-05 21:14
Captain she cannie take the strain any longer - any more oil and she'll burst at the seams - we'll have to start giving it away . . .
Oh hang on - we already are !
 
 
# cynicalHighlander 2013-05-05 22:09
The Politics of Oil In Scotland: www.theoildrum.com/node/9967
 
 
# mountain man 2013-05-05 23:15
Prepare for a full on attack on this report from the unionists and the msm,or it will be ignored.
 
 
# WRH2 2013-05-05 23:26
Shades of McCrone 2. And I still don't think this gives us anywhere near the true picture as to the amount of oil we have. Companies like to play down the reserves. No wonder we are seeing dirty tricks, scaremongering, and other assorted tactics from the No Campaign.
 
 
# Ian Edinburgh 2013-05-06 12:24
Funny nothing on radio on TV news.
I wonder why . . . BBC silent
 
 
# Dcanmore 2013-05-06 14:18
"In a statement, the official anti-independence campaign Better Together said: "This report shows the volatility of oil prices. Some people say the price could be as low as $90, some say it could be as high as $270. No one knows, so why would you want to gamble?"

Well, then base your annual spending budget on $90 per barrel and the rest goes into the sovereign oil fund. Now, £4trillion? That would be around £700billion into an independent Scottish economy! Oh yes!
 
 
# cjmasta 2013-05-06 15:31
This gives me hope that even if we lose the referendum and it takes say another ten or twenty years to achieve our independence we will eventually benefit from our O&G resources.
I look forward to the day it all unravels for the UK and those who run it for their own financial benefit with the people of these islands an afterthought.
When it all comes tumbling down there will be a lot folk who will be shown to have actively worked against this country and I think the current media`s presence in Scotland will come to an end when people realise the extent of their influence.
 
 
# TonyD 2013-05-06 18:14
Can anyone please post a link to the report when it is published. The message has to be spread to everyone.
 
 
# farrochie 2013-05-07 07:46
Regarding Prof Patterson's claim that there could be years of legal wrangling about oil. GMS just reported the SNP believes Scotland is entitled to "the lion's share" of North Sea oil reserves.

Surely, Scotland is entitled to the oil lying within Scotland's Exclusive Economic Zone. We may need a re-negotiation of the maritime boundary to recover the 6000 sq mile of "transferred" waters, but the EEZ is otherwise well established as "Scottish waters".
 
 
# Ysabelle 2013-05-07 08:14
I wonder if the new claim that there could be years of legal wrangling over the oil will be the new scare story this week to see off the news that the oil and gas has a higher value than previously thought. If the David Hume Institute report in the article above is set to be published this week, the NO campaign and their media allies are going to want to spike it as best they can.

Their 500 questions has been a disaster. Totally ridiculed on Twitter last night, and some Tweeters are still at it today.
 
 
# Willow 2013-05-07 08:19
Today as expected we have Douglas Fraser putting a negative spin on this.

bbc.in/140eMrb
 
 
# ynot 2013-05-07 08:22
Oh no! Another "warning" from BBC elaborated on GMS this morning. Whilst agreeing that the majority of oil reserves accrue to Scotland Prof John Patterson of Aberdeen University thinks the negotiations on ownership could take a very long time to conclude as there is "no clear precedent" internationally for deciding who has a claim to oil on the continental shelf. Call me old-fashioned but what happened in the case of Norway? Could the UK now claim some of Norway's oil and gas from the continental shelf outside Norway?
Also suggesting more or less that rUK would play hardball in the event of independence following a democratic process which the current UK is signed up to, and that it is a reasonable position for Westminster to take by not entering discussions on the issue at this stage and thereby "revealing their hand".
Prof Patterson is delivering a paper on this subject tonight so I await with interest the reaction of the MSM tomorrow - not. We know the script already...
 
 
# call me dave 2013-05-07 12:42
Oh dear "It's déjàvu all over again" as Yogi Berra once said.

Same old arguments every week.

But this is a biggy folks make no mistake the forces of the unionist coalition will be unleashed and sabres will be glinting as well as rattling.

But Scotland is not alone or without friends and it is not the 18th century any more.
All we have to do is stay calm and vote YES in 2014.
 

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