Much of the focus in the energy sector recently may have been on renewables; but the Chief Executive of Oil & Gas UK has predicted that there’s still a bright future ahead for the North Sea. Malcolm Webb told a conference at Aberdeen University that he believes the current estimates for Scotland’s oil and gas reserves – 24 billion barrels – are an “underestimate”.
He went on to criticise the “awful political decisions” taken by the Government in London. In what’s thought to be a reference to the one-off tax imposed by Chancellor George Osborne in last year’s Budget, he described the decision as “capricious” and suggested that it had already had a negative impact on the industry.
However, he went on to claim that a “political consensus” had begun to emerge between the industry and the Governments in London and Edinburgh. He argued that the industry should not become a “political football”. He accepted that the public had some misconceptions about the industry – confirmed by a recent survey but added that Oil & Gas UK was working to raise industry’s political profile, something which included improving its image.
On the issue of Scottish independence, Mr Webb said he believed the industry should adopt a stance of “studied neutrality”. The constitutional future of Scotland was a matter for the electorate, he said, adding that the industry had a duty to live with whatever outcome results from next year’s referendum.
Mr Webb went on to discuss the critical role that the sector plays in the UK’s economy. It follows news from the Organisation for Economic Co-operation and Development (OECD) that the total revenue still to come from Scotland’s oil and gas sector could be as high as £4 trillion. Its economists had forecast an increase in the price of a barrel of oil ranging from $150 to $270 over the coming decade, which means that the value of oil and gas could be worth between £2.25 trillion and £4 trillion. Despite this, he believes that the reliance of an independent Scotland on oil and gas revenues would not be “overwhelming”.
Commenting, SNP MSP, Mark McDonald, described his comments as “measured and sensible”. He said that “the oil and gas industry clearly shares Malcolm Webb’s confidence in the future of the North Sea, with the sector investing a record £13 billion this year alone in improving production.”
He went to add that “with some £1.5 trillion in wholesale revenues remaining in these waters – and potentially much higher depending on oil prices – it is essential that Scotland gains the opportunity to use these resources to the benefit of people living here. With the powers of an independent Scotland we can use these resources to build a more prosperous Scotland, rather than squander the revenues to prop up the failures of Westminster Chancellors.”