Talking-up Scotland

From the BBC Scotland website yesterday:

‘Forecasts of how much oil and gas could be produced by the UK offshore industry have been revised upwards. The industry regulator now believes 11.9 billion barrels will be extracted by 2050, up from an estimate of eight billion four years ago.’

https://www.bbc.co.uk/news/uk-scotland-scotland-business-47516655

Brent Crude is currently sitting at $65 per barrel so that makes a total of $773 billion.

https://oilprice.com/Energy/Oil-Prices/Brent-Crude-Hits-2019-High-At-65.html

If the UK Treasury taxes it at 19% (current rate), they’d take in $146 billion.

Around 90% of that income derives from Scottish waters.

https://www.niesr.ac.uk/?PublicationID=3179

Would they tax it? The precedents are not good. See this from Professor Richard Murphy:

 London is giving away Scotland’s oil revenues

Tom Mitro, who managed Chevron’s taxation and financial planning in the North Sea in the 1990s, said [a new tax] scheme could deprive the Treasury of more than £3bn in tax over the next decade.

“Overall impact on the Exchequer of [the transferable tax history scheme] could range from virtually zero to roughly [a] £3bn [plus] reduction in tax receipts over the next 10 years depending on oil prices and [the] number of asset sales and decommissioning [of North Sea platforms and pipelines],” he said in a research paper prepared for Global Witness, the non-governmental organisation.

But why does the Treasury care? If it assists the spin that Scotland cannot survive on its own, I suspect that’s considered a price worth paying. And I would not be at all surprised if that is part of the political motivation for this.’

http://www.taxresearch.org.uk/Blog/2018/09/03/london-is-giving-away-scotlands-oil-revenues/