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North Sea oil reserves could be higher than forecasts suggest

Article By: ,  Financial Analyst
August 18, 2014 11:15 AM

Oil and gas forecasts have been labelled as "too pessimistic" by a new report.

There have been fears that the impending Scottish vote on independence could impact on the UK's oil and gas industry. The UK Office for Budget Responsibility (OBR) forecasts North Sea revenues to be £61.6 billion for the period between 2013/14 and 2040/41 but a self-proclaimed "apolitical business organisation" believes that figure is far too low.

N-56, founded by advisory board member for Yes Scotland Dan Macdonald, stated that future North Sea oil and gas revenues could be six times higher than the estimated figure. The organisation said that £365 billion could be generated during this time period if a series of recommendations were implemented.

The organisation laid out a range of suggestions that could help the UK to get the most out of its oil and gas sector. Among the recommendations was the establishment of a more competitive tax regime for the region. N-56 also called for all decision-makers for taxation and regulation for the sector to be relocated to Aberdeen, regardless of whether Scotland becomes an independent nation or not.

Graeme Blackett, from N-56, said: "The OBR puts forward incredibly pessimistic forecasts on both barrel price and reserves, largely discredited by industry experts.

"What is clear is these natural resources can be maximised through implementing the recommendations put forward both by ourselves and the Wood Review, delivering considerable surpluses that we would recommend are used to invest in an oil fund to benefit future generations."

Scotland goes to the polls on September 18th to vote on whether it wants to become an independent nation, breaking away from the UK. Support for the Yes campaign has risen slightly over the past months, despite leader Alex Salmond failing to win over voters during a TV debate.

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