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In North Sea Oil Fight, If Scotland Wins, Britain Freezes

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Alistair Darling, the leader of the campaign to keep Scotland part of the United Kingdom, campaigns in Edinburgh. A no vote will keep Scotland in the UK. The British pound slid and the stock market shuddered on Monday after an opinion poll showed that Scots may vote for independence on Sept. 18.
  • Why it matters

    Why it matters

    If Scotland leaves Britain, control of billions of pounds in annual North Sea oil revenue will be thrown into question.

  • Facts

    Facts

    • Scottish offshore rigs produce 90 percent of Great Britain’s oil.
    • Oil wealth has made Aberdeen one of Britain’s wealthiest cities on a per-capita basis.
    • Although oil reserves are predicted to last another 30-40 years, production peaked more than a decade ago.
  • Audio

    Audio

  • Pdf

Alexander Kemp is a popular man. The phone in his office on the third floor of the Edward Wright Building at the University of Aberdeen has hardly stopped ringing in months. Mr. Kemp, a professor of petroleum economics, advises the British and Scottish governments on the prospects for oil production in the North Sea.

“The BBC, a Spanish TV team and journalists from Belgium and France have called me,” the Scottish native reports. There is no doubt that Mr. Kemp’s expertise has made him a key figure in the debate over Scotland’s independence, which will be decided in a referendum on September 18.

Scottish nationalists cite the billions in revenues from the oil industry, which they see as the financial foundation of their independence plan. Great Britain is Europe’s second-largest oil producer, next to Norway, and 90 percent of its oil comes from wells off the Scottish coast. But the Scots receive only about 8 percent of tax revenues from their oil wealth – last valued at about £11 billion (€13.7 billion or $18 billion) a year – based on Scottish and British population figures.

The nationalists are betting on the financial resources of Scotland’s oil wealth, even more than on their whiskey, smoked salmon and financial industries.

These oil riches have also spelled prosperity for many of Aberdeen’s 230,000 residents. Helicopters circle the skies over the coastal city all day long, as they ferry workers to oil rigs far out at sea. Outside London, there is no other city in the United Kingdom with more people earning more than £100,000 per 1,000 inhabitants than Aberdeen.

If Alex Salmond, Scotland’s first minister, has his way, all of Scotland will benefit from this oil wealth. The industry will produce “many billions of barrels for many decades,” he said in the last session of parliament before the referendum.

Mr. Kemp disagrees, saying: “It isn’t quite that easy.” As he explains, Scotland will be able to continue exploiting oil reserves off its coastline for at least another 30 to 40 years, but it is also clear that the industry has already passed the peak of the production boom in Scotland, as even the nationalists concede.

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