Jim Sillars: Scotland should buy an oil company

A Brent Alpha oil rig.
A Brent Alpha oil rig.
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The SNP should nationalise a North Sea oil and gas company and play a direct role in energy production to combat fuel poverty, former party deputy leader Jim Sillars has said.

Mr Sillars claimed Scottish Government plans to create a publicly owned energy company do not go far enough and called on Nicola Sturgeon to snap up one of Scotland’s offshore producers.

The former Nationalist deputy suggested Scotland could follow the model used in Norway, where the government owns two-thirds of Statoil, one of the largest oil companies in the world with a turnover of more than US$45 billion last year.

At the SNP conference this month, Ms Sturgeon announced the creation of a not-for-profit energy company
to sell cheap green energy
to consumers. She said: 
“Energy would be bought wholesale or generated here in Scotland – renewable, of course – and sold to customers as close to cost price as possible. No shareholders to worry about. No corporate bonuses to consider.”

In an article on the ThinkScotland website, Mr Sillars said a state-owned energy company should be involved in fossil fuel production, arguing that, “as things stand now, the Scottish nation doesn’t own a bucket of the black stuff” and that it should also take part in gas fracking.

The company should be free to make a profit and contribute to the public purse through dividends, as well investing in energy production.

Mr Sillars warned that Scotland’s publicly owned energy company “will be joining a regulated market, dominated by giants, in which there can be no special treatment for the new Scottish company because the Holyrood Government does not have the powers to make it so”.

He added: “I would prefer a much bolder model, in which ‘profit’ would be one of the objectives.

“My model is a Scottish Energy Corporation as a holding company, with divisions engaged in fracked gas, oil and renewables, which would, like Statoil, act on their own when appropriate and in partnership with private companies when such would better achieve the objectives.

“It would see the Scottish Government buying an oil company, either wholly or in majority part, borrowing against the asset to do so...

“That would give us two advantages: for the first time we would have a public practitioner’s window into the business, and secondly we would see profits with extraction costs varying from $15-20 a barrel while the price has been bouncing between $56-58.”