The argument about the prospects for North Sea oil took centre stage this week in the debate about Scotland’s independence, as David Cameron and Alex Salmond both hosted meetings in or near its petro-economic centre, Aberdeen.
The meetings were timed to coincide with the publication of a report by Sir Ian Wood, a “neutral former oil executive”, on how to maximise the potential of North Sea reserves, says The Daily Telegraph. Sir Ian predicts at least £200bn in future oil and gas revenues, but only with a “coherent fiscal and regulatory regime”.
Shrunken margins and looming decommissioning costs will require lenient tax treatment; a new regulator would be needed to supervise licensing and ensure maximum collaboration between firms to explore and develop new fields.
David Cameron pointed out that the “broad shoulders” of the UK government would be more able to provide the necessary support. Alex Salmond, a former oil economist, does “not take kindly” to “outsiders” having a say, says the Telegraph, but there are “questions that need to be answered” posed by people “even more expert than he”.
The “idea of Scotland as a Caledonian Norway remains an article of faith” for Salmond, but his arithmetic is questionable, says John McDermott in the FT. Salmond claims that, with sole stewardship of the oil, Scotland would be the sixth-richest country in the world on a per-capita basis.
This would not only support public spending (about 10% higher than the UK average), but would also allow it to set up a sovereign wealth fund.
What this ignores, however, is the “large share of profits” that would go to overseas oil firms. The SNP’s estimates of future production are also “significantly higher” than those of the government watchdog, the Office for Budget Responsibility.
Neither Cameron nor Salmond won the argument, says The Guardian. But opinion polls show that such debates are having an impact. There is “much more to say” before the referendum.