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Pin to quick picksLloyds Share News (LLOY)

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Share Price: 52.20
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UPDATE 1-Shell wants Scotland to stay in UK as oil firms opt for stability

Thu, 06th Mar 2014 14:19

LONDON, March 6 (Reuters) - Royal Dutch Shell hasbecome the second energy heavyweight to urge Scotland to stay inthe United Kingdom as the campaign for Scottish independencebattles mounting opposition from businesses.

Shell is a key player in the North Sea oil and gas fieldsoff Scotland and its Chief Executive Ben van Beurden said a votefor independence on Sept. 18 would mean greater uncertainty forthe energy industry.

Last month, the boss of BP warned Scottishindependence could cause "uncertainties" for his company.

Other oil companies in the North Sea on Thursday stressedthe importance of predictability for their operations, joining agrowing number of financial services companies voicing concernsabout the impact of independence but avoiding political comment.

Another of Scotland's largest companies Aggreko, aprovider of temporary power generators which has itsheadquarters in Glasgow, joined the chorus on Thursday.

It said independence would likely add significantly to itsadministration costs as its UK operations would have to be splitinto two trading entities.

Opinion polls have the independence movement trailing withonly about one third of voter support but the gap in the pollshas narrowed this year as the debate gathers pace.

Van Beurden said he valued the continuity and stability thatthe UK offered, arguing for its continued inclusion of Scotlandand membership of the European Union.

"We'd like to see Scotland remain part of the UnitedKingdom," Van Beurden told a company event in London onWednesday evening as reported by the BBC.

"We're used to operating in uncertain political and economicenvironments. But, given a choice, we want to know as accuratelyas possible what investment conditions will look like 10 or 20years from now."

CURRENCY, TAX CONCERNS

Scotland's Energy Minister Fergus Ewing offered to meetShell to discuss the future of the oil and gas industry ifScotland votes to end its 307-year tie with England.

"An independent Scotland with full control of its economyand huge resources will offer an attractive and stableenvironment for businesses in the offshore and other sectors,"Ewing said in a statement.

Norway's Statoil, also a major operator in theNorth Sea, said it stood by a statement made by industryorganisation Oil & Gas UK, which said it was essential theindependence debate did not create any instability.

That view was echoed by TAQA, a subsidiary of the Abu DhabiNational Energy Company.

"Predictability and long-term planning are what the industryrequires of any government, particularly in the fiscal regimeand the licensing and regulatory framework," said a spokeswoman.

Several financial services companies have raised concernsabout the risks, with Barclays and state-backed LloydsBanking Group joining the list thisweek.

Among their concerns, companies have highlighted uncertaintyover what currency would be used in an independent Scotland, howtax and regulatory regimes might change, the cost of doingbusiness and whether EU membership would be feasible.

Two airlines, however, British Airways and Ryanair, have said Scottish independence could be good for theirbusinesses due to proposals to abolish air passenger tax.

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