Scottish independence: An independent Scotland could amass an oil fund that would “never run out” and reach £147 billion within 25 years of a Yes vote, according to new research.
The SNP Government wants to set up a Norwegian style fund and a report by leading North Sea employment firm oilandgaspeople.com finds it could eventually bring in an income of between £2.9 billion and £5.8 billion - the same amount as North Sea taxes alone.
Kevin Forbes, of oilandgaspeople.com said: “The significance of this shouldn’t be underestimated.
“If Scotland invests now for the future, it could find itself with a never-ending supply of funds derived from North Sea oil and gas. In other words, the oil and gas money will never run out.”
The calculations were based on current estimates for tax receipts of £6.4 to £7.8 billion annually. This is significantly higher than the £4 billion and £5.5 billion which was raised in the past two years, although new investment is expected to see production increase in the years ahead.
The economists allowed £5 billion of these receipts to be invested back into the Scottish economy in order to ‘balance the books’, leaving between £1.4bn and £2.8bn to be invested into a wealth fund each year.
The annual compound interested was calculated using figures provided by the Government Pension Fund of Norway, or Norway’s Oil Sovereign Wealth Fund, which grew at 5.7% a year.
The economic outlook found that if only £1.2 billion was invested each year into an oil fund and, then Scotland could expect a fund worth £73.64 billion in 24 years. If the fund grew to the higher estimate of £147.28 billion, then £5.8 billion could be reinvested back into the Scottish economy.
Mr Forbes added: “It took a lot of courage for the politicians of Norway to invest its oil and gas receipts into a fund for the future. At the time, every other oil nation was spending its oil money today, without thinking of what the future might bring. Now we know. While the rest of the oil nations of Europe are in deficit, Norway is able to ride out financial instability thanks to its courageous forward planning.
“North Sea oil and gas won’t last forever, but the tax receipts it produces can if Scotland invests now in a Scottish oil fund.”