Debate continues over scale of N. Sea oil reserves

Two leading academics have claimed that Scotland has sufficient reserves of oil in its sovereign waters to support the economic plans put forward by the SNP.  

In a new article by Alex Russell, the Professor of Petroleum Accounting at Robert Gordon University in Aberdeen, and Peter Strachan, Professor of Energy Policy at RGU, they state that the Office of Budget Responsibility’s oil forecasts were “ludicrously pessimistic”.

 They also agree with Professor Alex Kemp, one of the world’s leading oil economists, who has advanced modelling on the North Sea oil and gas fields, also stating “the ultimate potential of 24 billion barrels of oil equivalent foreseen by Oil and Gas UK appears plausible.”

It follows a statement from Oil and Gas UK that they “remain of the view that there could be up to 24 billion barrels of oil and gas to recover.”  

Scottish Energy Minister Fergus Ewing welcomed the professors’ comments. He said: “ As we have always said, Scottish Government oil reserve figures are based on industry figures, and thus I welcome Oil and Gas UK’s confirmation that they stand by their original estimate that reserves could be up to 24 billion barrels.

“Coming on the back of a similar statement by leading oil and gas academic Professor Alex Kemp, and a new article by Professor’s Russell and Strachan of Aberdeen’s Robert Gordon University, it is clear that North Sea reserves remain substantial.

 “That a leading Professor in Petroleum Accounting also believes that the OBR’s forecasts are “ludicrously pessimistic”, also shows that the OBR stats now have no credibility whatsoever.

 “What is important both for the industry and for public finances is to bring an end to the Westminster mismanagement of the oil and gas tax regime, which has brought in sudden and unpredicted changes in taxation affecting the system – causing uncertainty and damaging any remaining reputation the UK had for good stewardship of Scotland’s oil wealth. The 2011 hike in the supplementary charge is the most infamous example, but even this year sudden changes to the fiscal rules affecting the industry have caused great concern.

SNP Treasury spokesperson Stewart Hosie MP, added: “These are welcome comments, from two experts, which will hopefully help put to bed some of the nonsense which is being peddled by the No to Independence campaign on Scotland’s oil wealth. 

“Scottish Government oil reserve figures are based on industry figures, and so I also welcome Oil and Gas UK’s confirmation that they stand by their original estimate that reserves could be up to 24 billion barrels.

 “The No campaign are desperate to talk down Scotland’s immense wealth because they know that their entire argument is based on trying to pretend to people in Scotland that their country is one of the poorest in the world – when it is in fact one of the wealthiest in the world.”