Before I go any further remember this is May 2017 and these are figures for last year.
According to Oil Industry News on Friday:
‘Scotland’s share of oil revenue plunged into the red for the first time on record, the SNP Government’s own figures revealed yesterday. Tax receipts fell to minus £338million over 2016 – partly reflecting the cost of tax relief in the industry. The dramatic decline contrasts with accounts in 2005-12 when offshore oil revenue never fell below £6billion a year.’
Readers will know, of course, that Scottish North Sea Oil revenue funded the Thatcherite governments’ ‘restructuring’ (de-industrialising) of the UK economy throughout the 80s and 90s. The total subsidy was around £100 billion in taxes so last year’s loss, the only one ever, is nothing much especially when we now know that a ‘Third Wave’ of prosperity has already begun with so-far unannounced millions (billions?) flooding into the UK Treasury in 2017. This has been based on the steep increase in demand from Asia especially from China for heavy-grade oil of the kind the North Sea specialises in. See this for evidence:
In April alone, North Sea tankers have taken more than 16 million barrels to Asia. Once more the income will be flooding into the UK Treasury.
Also, according to Goldman Sachs, in Energy Voice, the market is ‘rebalancing rapidly’ and ‘demand will significantly exceed production’, according to the IEA’s Head of Oil Industry and Markets, Neil Atkinson. US stockpiles fell by the 5.2 million barrels in one week. So much for the risk to prices posed by shale. The global supply deficit is predicted to be as wide as 2 billion barrels per day by July.
And, beyond 2017, the picture is very promising indeed with massive finds west of Shetland. Hurricane have been increasing their estimates from 600 million to 2 billion and now to 8 billion in just one month. Essentially what has happened is that exploratory drilling has reveal that four already large fields, some parts as much as 35km apart, seem to be part of one massive column of oil. Also, it’s going to be relatively easy and efficient getting the oil out as the geology is familiar, fractured and the same across the area, so amenable to current techniques, with almost zero likelihood of getting water out rather than oil.
Remember that was last year’s news. No doubt we’ll hear about 2017 oil revenues by May 2018.