He continued: “However it is clear that Westminster has not learned the lesson of its mistakes and this year we saw the sudden introduction of the change to the bareboat charter tax rules – increasing exploration costs just after Oil & Gas UK raised concerns about reduced exploration drilling, and brought in by Westminster despite widespread concern and opposition from the industry. “As set out in Scotland’s Future, with the powers of independence, these sudden and damaging changes will end. We commit to provide long term stability and certainty, including a commitment to formal consultation on any future reforms. We will work to support and incentivise production and provide efficient fiscal incentives that encourage exploration and help maximise recovery rates – for the benefit of the both the industry and the people of Scotland.”
Consultancy company Wood Mackenzie in a report said that while the bulk of UK oil and gas reserves (circa 85%) lie in Scottish waters, and an independent Scotland would control the vast majority of production as well as the most prospective acreage, there are many challenges ahead. The company said that the Scottish Government would need to balance a desire to maximise precious revenues from its prize asset whilst ensuring the longevity of the industry. This longevity depends on continued investment from oil and gas companies, who in return will demand fiscal certainty, regulatory stability and appropriate fiscal incentives.
The U.K. North Sea generated about 1.5 million barrels of oil per day last year, down two-thirds since 2000, generating nearly £5 billion in tax revenues. But dealing with the U.K.’s fluctuating tax rates has frustrated oil companies over the years.
If Scotland gets its freedom, things could change. For oil companies with a lot of exposure to the region, such as BG Group (a sixth of its production) and Total (the region’s top producer), dealing with a much smaller country should offer an opportunity to negotiate better terms. All will have had discussions with Holyrood officials about how the new Scotland will run the North Sea.
And the investment case is already suspect. No matter how much oil is still down there (the debate rages on), more spending over the past decade has not resulted in more production. And the Scottish economy would be at risk if Holyrood cannot persuade companies to invest. Scotland’s oil production is worth at least 15% of its tax revenue, according to UBS Wealth Management.
Fiscal calls show a significant drop in taxes for an independent Scotland over several yrs to come , so the chance on the SNP promises on Corp tax reductions looks very weak....as for rig workers in Aberdeen this is only part of the picture, the persons I allude the Company Managers and Engineers who live in Scotland....and whose headquarters are in other countries....incl. England. Couple of Lads I know trying to sell their houses in past few days have seen persons pulling out of viewing...may be the weather! ...add the fact American Investors have woken up to the coming vote ' hope I'm wrong' but see BP suffering up to and after any Yes vote.....anyways sold out on the jump and now for Greener Pastures ...excuse the pun.
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