Talking-up Scotland

© oilandgaspeople.com

As crude stabilises around $50 per barrel even the major corporations are returning to healthy profits. We know that the mid to longer-term prospects are for even higher prices:

Will Scotland’s oil hit $100 (or more?) a barrel again after 2020?

According to Oil and Gas People, Exxon-Mobil and Dutch Shell expect to double their second quarter profits over last year and Total expects to report a third consecutive quarter of higher profits, year-on-year. Referring to increased efficiencies, Oil analysist Sanford C Bernstein is quoted as saying:

‘We used to make money at $40 oil, we used to make money at $25 oil.’

I’m not sure how far back in history he’s talking about there. With North Sea oil flowing to the greedy markets of China and India by the multi-tanker-load, we have little to worry about. See:

Scottish oil in new and much increased demand from Asia ‘like never before!’

https://www.oilandgaspeople.com/news/14753/major-oil-companies-beating-slump-as-ceos-learn-to-live-with-50-crude/

On June 16^th, I wrote:

‘It’s not just the oil and gas exports that make the money now. After decades of experience gained in the North Sea and in west of Shetland’s deeper stormier waters, Scotland now earns just over half of its income from international business supplying equipment and expertise across the globe….The survey producing the £11.4 billion figure was carried out by Aberdeen Chamber of Commerce for Scottish Enterprise and had responses from 295 companies employing 63 000 staff.’

This came from a Scottish Enterprise survey reported in the Scottish Business New Network:

Scotland’s oil and gas expertise earned £11.4 billion in 2015/2016 supported by Scottish Government investment

Now SengS from the North-East of Scotland have secured a contract to design and supply test equipment for operators in the North Sea. More, they have also won the contract to design a subsea project for Tunisia with the manufacturing being done in Ellon near Aberdeen.

Though no specific mention is made in this report, much of the new design and development work has been assisted by the Scottish Government’s Energy Jobs Taskforce, which has delivered:

 ‘a significant amount of support to companies around key areas such as innovation, diversification, leadership and internationalisation. An example of this was a series of new market guides published late last year to help companies understand more about potential new markets. Helping companies to grow their international activity saw 59 companies join us in May on the Scotland pavilion at OTC in Houston, one of the world’s largest oil and gas shows. Events like these make a huge difference to companies looking to grow their international presence, helping them showcase their world-renowned skills and experience and build important new contacts.’

 The SengS contract could well be another beneficiary of the above.

https://www.oilandgaspeople.com/news/14756/subsea-engineering-firm-sengs-nets-16-million-worth-of-contracts/

Scottish beef can now be sold anywhere globally after the World Organisation for Animal Health (OIE) recognises the BSE risk from beef raised in Scotland is at the safest level available – negligible risk. England and Welsh beef remains at controlled risk BSE status and will not be reviewed before 2020.

Rural Secretary Fergus Ewing who was applauded by the Scottish Association of Meat Wholesalers for his help with the bid for approval, said:

‘This is reward for years of hard work from the Scottish Association of Meat Wholesalers, producers, our red meat businesses, vets, and this government all of whom have worked tirelessly to build a failsafe system which protects our animal and public health. Scotland’s meat exports are currently thriving and this certification stands us in good stead for our exporters to increase Scottish Beef exports even further.’

The president of the Scottish Association of Meat Wholesalers (SAMW) described the work of Fergus Ewing and his staff as ‘invaluable’.

https://news.gov.scot/news/bse-risk-status

Here’s some background to the story I wrote earlier in the year.

Some readers may remember how BSE started. If not see this from Frederick A. Murphy, DVM, PhD, Dean of the School of Veterinary Medicine at the University of California in mad-cow.org:

‘In the early 1980s in England the rendering process (by which livestock carcasses are converted to various products, including protein supplements for livestock feed) was changed. Earlier, a solvent extraction step had been used to extract fats (tallow); this step was stopped when the price of the petroleum-based solvents used to extract fats went up. The infectious agent is solvent-sensitive. Otherwise, the infectious agent is extremely hardy — it can survive boiling and many disinfectants, but is readily destroyed by extremely high temperature (such as in an autoclave), or by oxidizing agents, or by solvents.’

http://meatinfo.co.uk/news/fullstory.php/aid/20923/Scotland_92s_wholesalers_welcome_BSE_breakthrough.html

(c) lochaberhousing.org.uk

I wrote this on July 9^th:

With a 29% increase on last year, new affordable home-building is at its highest level since the 1980s when Maggie Thatcher had yet to do her worst and Tony Blair was just a bad dream.

The Scottish Government is investing more than £1.75 billion over the next three years with funds provided to local authorities to enable delivery of the target of 50 000 by 2021.

The construction work should also add a further 14 000 new jobs each year.

The funding for the local authorities announced in advance to enable smooth planning is

2018-19           £532 million

2019-20           £591 million

2020-21           £630 million

This £1.75 billion takes the total for this parliament to £3 billion for affordable housing. This is, no surprise, twice the per capita level of the English Government’s building despite the latter’s faster growing population.

I’m assuming the 200 homes for the Upper Achintore site in Fort William are being funded by the same scheme. The Chair of The Highland Council’s Places Committee said:

‘This is good news for Lochaber where there has been a shortage of affordable housing. The development is especially welcome given the regeneration of the Fort William Smelter and the new job opportunities coming to the area. It comes on top of the recent welcome Scottish Government investment which has enabled the Council and their partners to deliver new affordable homes in Tweeddale Apartments, Raasay Court and Belhaven Drive.’

You’ll find more detail on the smelter at:

‘Lochaber once more’: £450 million deal for the Highlands

 

https://news.gov.scot/news/gbp-1-2m-for-affordable-housing-in-fort-william

 

© oilprice.com

Though prices just under $50 per barrel are profitable for North Sea oil extractors they’re too low for shale oil extractors. I’ve already written about shale oil’s limited future:

The Scottish Third Wave of Oil Productivity is built on solid foundations but those of the Shale Oil Industry are built on sand and on sand that is disappearing fast

Now see this from Oil and Gas People:

‘That [prices around $46pb] could make this week a turning point for the troubled global oil market — the moment when shale companies showed signs of bowing to the low prices they helped inflict.’ “This U.S. surge is showing signs of plateauing and customers are tapping on the brakes”, Halliburton Executive Chairman Dave Lesar told analysts on a conference call earlier Monday. The comment came just days after data from Baker Hughes showed explorers cutting the number of U.S. rigs for the second time in four weeks.’

Safety factors too look like further weakening shale’s prospects. Major extractor Andarko which already had lost nearly $1 billion in the last two years, had a fatal explosion in April that that has led it to shut down 3 000 wells for inspection. Also, risks to the public continue to come up reducing the attractiveness of the business to investors scared off by possible compensation costs. On top of these, staffing shortages are putting a cap on growth in fracking. See these:

Scottish Oil predicted to rise to at least $60 per barrel by end of 2017 as fracked shale oil faces safety crisis

https://theferret.scot/dont-scotland-fracking-warning-pennsylvania/

http://oilprice.com/Energy/Energy-General/Shortage-Of-Fracking-Crews-Slows-The-Shale-Boom.html

https://www.oilandgaspeople.com/news/14745/shale-boom-may-finally-have-succumbed-to-oils-price-slump/

A survey by NRPS has revealed Scotrail’s satisfaction rate to be the highest ever at 90% up from 83% last year and well above the UK average which is still only 83%. Detailed satisfaction rates were:

Speed  92%

Punctuality 85%

Reliability 82%

While this is an improvement on the situation in 2016, it’s important to remember that things were far less problematic then than opposition politicians made them out to be. See:

Reporting Scotland uses out-of-date figures to distort the truth about Scotrail performance.

Crisis What Crisis? Scotrail’s punctuality improves again and is now better than the UK average for the first time

http://www.eveningtimes.co.uk/news/15432087.Passenger_satisfaction_with_ScotRail____reaches_record_high_____says_survey/?ref=twtrec

(c) forbes.com

I wrote this in February:

‘Fund managers now have the most bullish view on oil since the first half of 2014, when Libya’s exports were nearly halted by civil war and Islamic State fighters were racing across northern Iraq….Fund managers have been able to increase their bullish bets with almost no disturbance to the market price of crude. Volatility has been most remarkable by its absence.’

Are hedge-fund managers a bit like bookies? They survive because they know what’s happening and what is likely to happen? Oil prices have been steady at $55 per barrel and have stayed there despite the increased investment by hedge-funds. As I understand it from the article, when hedge-fund managers get too bullish then prices often fall but this time they’re holding.

https://www.oilandgaspeople.com/news/13492/hedge-funds-bet-big-on-oil/

After a few months falling just below $50 per barrel prices are holding at levels profitable to the more efficient producers and the hedge fund managers are investing the most they have since February. This along with many other longer-term indicators of imminent shortages suggest North Sea Oil remains of great value:

Independent Scotland’s oil wealth is assured as Aramco chief predicts huge shortages

https://www.oilandgaspeople.com/news/14736/oil-bulls-snap-out-of-funk-but-opec-doubts-still-loom-large/

© Scottish Parliament TV

That was back in 2016 when the 94.7% of Scottish A&E patients were seen then admitted or discharged in four hours or less. Around the same time, the Royal College of Emergency Medicine said:

‘Scotland has the best and still improving A&E performance in the World.’

That clearly wasn’t good enough.

However, for week ending 16^thJuly, 2017, 95.3% of patients were seen, admitted or discharged within the four hours. Surely Kezia, Ruth, Willie and the Unionist media will be all over this good news, praising NHS Scotland and the government of the day for this fine achievement. No?

https://news.gov.scot/news/ae-performance-above-95

The English figures for June or July are not out yet but in May the figure was 89.7% of patients seen within 4 hours. This is below the same 95% target and lower than 90.3% for the same month last year.

So, that’s not just well below the Scottish figure but the gap is widening. Come on Theresa, get on with your day job. Tell, her Ruth. Go, on.

https://www.england.nhs.uk/statistics/wp-content/uploads/sites/2/2017/06/Monthly-AE-Report-May-17.pdf

© heraldscotland.com

Around 7 000 Syrian refugees have been settled across the UK yet a disproportionate 1 800 or nearly 25% have been welcomed to Scotland. The Syrian war and refugee flood has been described as the worst humanitarian crisis since World War II so the UK intake is frankly pathetic.

Scotland’s greater hospitality, looks to me like just another example of the many ways in which we are different enough from England to be seen as a different country and logically an independent one.

I know it’s only 1 800 and we should get carried away with ourselves. You might like to read a piece I wrote a piece last year on the topic at:

http://indyref2.scot/why-scotlands-welcome-for-1000-syrian-refugees-should-be-a-matter-for-pride-but-still-kept-in-context

Refugees: The Kindness of Our Ancestors

I’ve also debated our other differences which Unionists love to deny at:

The job of protecting Scottish poor from excesses of Tory austerity

England’s over 85s are dying faster under Tory austerity. Are Scotland’s old folk being protected?

England’s pensioners are dying faster under the Tories: Are Scotland’s old folk being protected by the Scottish Government’s actions?

https://stv.tv/amp/1394165-scotland-welcomes-25-of-refugees-settled-in-the-uk/

(c) investopedia.com

Some kind of fallout from Brexit seems inevitable for London’s huge financial sector no matter what deal Theresa attempts to protect it. The EU is not in a mood to be kind and there will be losses. You might expect Edinburgh, the second biggest financial centre in the UK to suffer equally but there are crucial differences which will play in its favour.

First, Edinburgh is supremely well-positioned to take advantage of the move to technology- based finance or ‘fintech’. See this from Insider:

‘Edinburgh is in a unique position to ensure a vibrant and successful fintech sector, combining its position as the second largest financial centre in the UK with the benefit of a regular supply of 1,200 highly skilled computing and software graduates from its universities each year…..Whatever form Brexit may take, the UK will, by necessity, continue to be bound by the new rules on data protection set out in the GDPR, and so Edinburgh and the rest of the UK will still be seen as a safe haven for data processing, ensuring any outsourced fintech services can continue to be provided.’

Also, Edinburgh University has the biggest Computer Science department in the UK and the UK’s largest ‘start-up incubator, Codebase, host to 80 new companies. It was this environment which allowed the creation of the flight comparison website, Skyscanner, sold to the Chinese recently for £1.8 billion.

Second, Edinburgh has the advantage over London of a lower-cost of living at the same time as a higher quality of life.

Put these together and the prospects for fintech in Scotland are bright.

http://www.insider.co.uk/special-reports/how-entrepreneurial-edinburgh-blazing-tech-10793092