Scotland is planning a second referendum for independence. However, oil and gas experts believe that this could adversely affect jobs and investments in the North Sea.
Wood Mackenzie, a consultancy based in Edinburgh, came to this conclusion based on its analysis of the UK Continental Shelf after the 2014 referendum.
The report published by Wood Mackenzie has valued the oilfields and gas rigs at £44 billion. However, it states that the Scottish oil and gas industry is facing several challenges, including the cost of decommissioning mature and commercially unviable fields and the plunging oil prices. Since the last referendum, commercial reserves have declined by approximately 30 per cent.
The report mentioned that the tax revenue that Scotland generates from oil and gas will play a smaller role in the case for independence if a second referendum is held. While in the Scottish oil and gas fields, there are approximately 11 billion barrels of oil equivalent of reserves, it does not really help oil and gas contractors and companies since they also have the onus of decommissioning several fields in the area. The reserves in the Scottish waters are equal to about 80 per cent of the total cost of decommissioning oil and gas fields.
According to the report, oil and gas contractors and companies will need assurance from Scotland that if the call for independence is successful, they will still get the decommissioning tax relief that the government is presently giving them. However, this may not be the case should the country vote for independence.
Scottish opposition parties feel that a referendum at this stage is not prudent as it will prevent new and existing investors from investing in the North Sea.
Scottish Conservative energy spokesman Alexander Burnett MSP said that the Wood Mackenzie report clearly states that the call for the second referendum for independence could hamper the delicate recovery taking place in the UK North Sea, and this could adversely affect jobs and investments besides leading to chaos in the decommissioning market.