Scotland will witness a renewed oil boom in the next few decades and confirm its position as a major oil-producing nation and European energy powerhouse, according to a report published by the country’s government.
The Oil and Gas Analytical Bulletin said the nation’s oil and gas industry is expected to generate between £41bn and £57bn in tax revenues between 2012-13 and 2017-18.
The industry, including both onshore and offshore, is expected to contribute nearly £25bn to Scottish gross domestic product (GDP), which is about 17% of the total in 2011, while the North Sea oil and gas sector boosted the UK balance with payments of £40bn in the same year.
Industry body Oil and Gas UK has calculated that about 24 billion barrels of oil and gas equivalent could be extracted from Scottish waters, while the government has estimated the reserves have a possible wholesale value of up to £1.5tn.
By wholesale value, more than half of the oil and gas reserves could still be extracted from the UK Continental Shelf (UKCS), noted the report.
Scotland is estimated to be the largest hydrocarbon producer in the EU and produced 64% of the EU’s total hydrocarbon production in 2010, while it also accounted for 78% of total UK hydrocarbon production in 2011-12.
Commenting on the bulletin, First Minister of Scotland Alex Salmond said that country’s oil and gas industry is gaining strength with a significant number of investments in the North Sea.
"Projected investment will reach £13bn in 2013, whilst total investment in companies’ plans is worth around £100bn," Salmond added.
"It demonstrates that when the expected increase in production to two million barrels a day is taken into account, there can be little doubt that Scotland is moving into a second oil boom."
He added: "And, with more than half of the value of the North Sea’s oil and gas reserves yet to be extracted, up to 24 billion recoverable barrels with a potential wholesale value of £1.5 trillion, oil and gas will remain an enormous economic resource for many decades to come."
Image: First Minister of Scotland Alex Salmond. Photo courtesy of the Scottish Government.