Scottish independence: what would happen to the oil?

The first North Sea oil from Scotland's Forties field arrives by tanker at a filling station in Grangemouth in November 1975. Picture: TSPL
The first North Sea oil from Scotland's Forties field arrives by tanker at a filling station in Grangemouth in November 1975. Picture: TSPL
Share this article
0
Have your say

THE vast bulk of oil and gas reserves remaining in the North Sea lie in Scottish Waters and will be a critical part of Scotland’s economy for years to come.

In 2011/12 alone, about 94% of the UK’s North Sea revenues - about £10.6 billion – were generated in Scottish Waters. It is widely expected that Scotland would take a geographical share based on a “median line” split curving eastwards from Berwick if it leaves the UK.

Analysis by oil services giant Wood McKenzie suggests that about 85% of remaining oil and gas reserves are in Scottish Waters.

The taxes from oil and gas are crucial because they would leave Scotland’s public finances in better shape than the rest of the UK after independence. In 2011/12 Scotland had had a deficit of about £7.6 billion – the shortfall between money pumped into public spending and taxes raised. This is a gap of 5% set against overall spending of about £64 billion. In the UK, with a £120 billion deficit, the gap is 7.9%.

The SNP says this also means that total tax revenue per person, taking in personal and businesses tax, was £800 higher in Scotland than across the UK each year between 1980-81 and 2011/12.

The Scottish Government says that the stronger fiscal position could allow it to cut the deficit or boost capital spending on major building projects to boost growth.

The SNP has pledged to create an oil fund and pointed to the success of such a scheme in Norway which is now worth £450 billion for future generations.

But oil and gas revenues only account for about 16% of tax revenues and account for a smaller proportion of revenues than in some other major oil and gas producing countries.

SEE ALSO:

Scottish independence: UK underplayed value of oil

Scottish independence: ‘Oil can plug spending gap’