There’s still plenty left to parse ahead of Scotland’s historic independence referendum tomorrow, not the least of which are very real concerns over what a “yes” vote might mean for the country’s energy ambitions. The North Sea is lousy with oil deposits (though production from many of these seems to be tapering off), and many of the pro-independence agitators have campaigned on a desire to claim more of the revenues from these offshore plays. But as the New York Times reports, these fields could prove fractious for the Scotland-UK relationship:
[A] yes vote on Thursday could lead to protracted wrangling over the offshore oil and natural gas fields. Despite their diminishing returns, those fields remain extremely valuable….“Ownership of oil and gas reserves will be at the heart of the negotiations between Scotland and the rest of the U.K.,” Simon Currie, global head of energy at the law firm Norton Rose Fulbright, said via email.
Oil majors are apparently concerned that quarrels over new boundaries could stunt investment in the region, which is already seeing declining output, largely as a result of aging equipment. An independent Scotland is a wrinkle that investors, already concerned with the state of North Sea oil output, aren’t thrilled to contend with.There’s also the danger that the economic impact of greater ownership over offshore crude production is being overstated in the Scottish debate, as the NYT points out:
North Sea energy revenue — even if the bulk of it went to a stand-alone Scotland, as is expected — would not be sufficient to justify such a big bet on the country’s economic future…The approximately 5 billion pounds, or $8 billion, that the British government received in tax revenue from North Sea energy last year would have been the equivalent of only about 3 percent of the Scottish economy.
North Sea production has seen better days, but there’s still plenty of crude out there. Tomorrow’s vote could kick off an interesting conflict over how to divvy up that black gold. We’ll be watching.