Aug. 22 (UPI) — The Scottish government said Wednesday its share of the revenue generated from the North Sea soared, but sees risk from the British exit from the EU.
The Scottish government, in its latest report on expenditure and revenue, reported total public sector revenue at an estimated $76.7 billion. Of that, $1.5 billion was from the North Sea. The government reported that its share of offshore revenue marked a substantial increase over the $343 million reported over the 2016-17 period.
Scottish First Minister Nicola Sturgeon said in a statement the wider economic picture meant the regional economy was on the right track.
“This comes on the back of recent analysis by the Oil & Gas Authority that production this year is expected to be 18 percent higher than in 2014,” she added.
A regional survey of industry sentiment showed net confidence for the oil and gas sector was at its highest level in more than five years.
According to Scottish Finance Secretary Derek Mackay, the economy grew twice as fast as the British economy during the second quarter at the same time that confidence is returning to the North Sea oil and gas sector.
Oil & Gas U.K., a trade group representing the offshore segment, said the Scottish figures show recovery is under way for the North Sea following years of pressure from lower crude oil prices and field maturation.
“Improvements to operational efficiency, careful management of costs and a stable fiscal regime have ensured it is better placed to weather volatility in international oil markets,” Mike Tholen, a policy director for the group, said in a statement emailed to UPI.
First oil from the second phase of the Buzzard field in the North Sea offshore Scotland is expected in three years. Situated about 60 miles northeast of Aberdeen in shallow waters, the Buzzard field is the largest oil discovery made in the region in 20 years.
Scotland also has one of the more robust low-carbon programs in the world and its government in 2015 ruled that natural gas derived from underground coal deposits would have no place in a greening economy. Ministers had already enacted a separate moratorium on unconventional oil and gas extraction methods, like hydraulic fracturing.
Scotland pegged its future during a failed 2014 bid for independence on revenue from oil and gas reserves in the North Sea. Sturgeon stated on Wednesday that the British departure from the European Union now was the biggest threat to the Scottish economy.