The Scottish Government finally publishes its first oil projections since last September's referendum on the day MSPs leave Holyrood for their two-month summer recess.

SNP ministers have dramatically downgraded by tens of billions of pounds their predictions for the tax revenue generated by North Sea oil compared to their claims before the independence referendum.

After months of complaints that they were trying to hide the extent to which they exaggerated a separate Scotland’s oil wealth, they finally published updated figures on the day that MSPs left Holyrood for their two-month summer break.

The Scottish Government now predicts the North Sea will generate between £2.4 billion and £10.8 billion between 2016 and 2020. However, the higher figure assumes that the oil price returns to $100 per barrel.

It was the first update since four months before the referendum, in May last year, when officials predicted that oil and gas would generate between £15.8 billion and £38.7 billion for the public purse over a five-year period.

This means that the Scottish Government has downgraded its lowest estimate for North Sea revenues for the three comparable years by around 80 per cent since last September’s vote, the equivalent of £1,400 per person.

The most optimistic projection has been cut by more than two-thirds, the equivalent of £15 billion over three years or £2,873 per Scot.

Opposition parties said the figures proved Scots had “dodged a bullet” when they voted No to independence last September and accused the SNP of displaying “contempt” for parliament by slipping them out on the day that Holyrood rises for its recess.

Alex Salmond and Nicola Sturgeon told voters during the referendum campaign that Scotland was on the verge of another oil boom but the price has since collapsed to around $60 per barrel.

The sector would currently have to generate around £8 billion per year to put an independent or fiscally autonomous Scotland on the same financial footing as the UK.

But the impartial Office for Budget Responsibility predicts the North Sea will generate just £2 billion for the public purse between 2020 and 2040 as production declines and losses from decommissioning fields were offset against taxable profits.

Sir Ian Wood, the industry most eminent expert, said before the oil price collapsed that between 15 billion and 16.5 billion barrels remained that were economic to extract. However, the new Scottish Government figures continued to insist that 23 billion barrels could yet be recovered.

Murdo Fraser, Scottish Tory enterprise spokesman, said: “It’s clear to see we dodged a bullet when Scotland voted No last September. If Scotland was independent we’d now have a massive financial black hole to deal with.

“The SNP attempted to keep the public in the dark and mislead on oil prices. When will the Scottish people get an apology?”

David Mundell, the Scottish Secretary, said: “To have the latest Scottish Government oil figures published 15 months after their last update, and on the last day before the summer recess leads to suspicion that these figures aren’t meant to be fully scrutinised by the Scottish Parliament.

“The Scottish Government’s central estimates on oil revenues published today are over 80 per cent lower than those they published before the referendum. This makes their current policy of full fiscal autonomy for Scotland all the more of a full fiscal shambles."

Jackie Baillie, Scottish Labour finance spokesman, said: “It is ridiculous that the SNP tried to sneak this report out on the last day of Parliament. It's clear that they have put their own political interests ahead of industry concerns. These new figures blow the SNP’s policy of full fiscal autonomy out of the water.”

Oil industry leaders have warned that it needs to “buckle down” for prices remaining low. Before the referendum, the Scottish Government figures assumed they would be between $110 and $128 per barrel.

Four of the five predictions published last year assumed that production would increase by 14 per cent between 2014 and 2019.

The most pessimistic scenario under the new figures projects tax revenues of £2.4 billion between 2016/17 and 2019/20, with production declining by five per cent per year and a price of $70 per barrel.

A second estimate of £4.4 billion assumes production increases, while a third figure of £3.4 billion assumes improvements to industry efficiency. A fourth scenario of £5.8 billion is based on production rising and improved efficiency.

The £10.8 billion upper estimate assumes the price returning to $100, increased production and better efficiency. However, four of the five estimates are more optimistic than the official projections produced by the OBR.

In an accompanying Scottish Government press release, John Swinney, the Deputy First Minister, did not mention the SNP’s massive overestimation of oil revenues during the referendum.

He said: “There is no disputing that the industry has faced a very challenging year and we continue to work relentlessly to safeguard jobs and retain vital skills.”

Source: www.telegraph.co.uk

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