A leading light of the energy industry today revealed he fears for Scotland’s future if it votes for independence and warned it would have just 15 years left before depleting North Sea oil reserves began to hit jobs and the economy.
In his first and only interview to date centred on the independence debate and the role oil revenues will play in it, Sir Ian Wood said he fears the SNP massively over-estimated the amount of oil – and therefore tax revenues – available to an independent Scotland and that the country could be forced to import energy generated from England’s onshore fields.
He said: “I believe the debate should not be about nationalism, but growth and economic success, and the quality of life for citizens and all that goes with that. Against these measures, it’s very hard not to conclude the case is heavily weighted towards Scotland remaining in the UK and getting the best of both worlds – I want the best for future generations of Scots.”
The man, who built an energy empire, was reluctant to come forward with his views, but admitted he was driven by a need to one day tell his grandchildren he did all he could when presented with the chance.
He also credited “wildly inaccurate misquoting” of his historic Wood Review from the both the No and Yes camps for motivating him to wade into the discussion.
Sir Ian, who stressed he had “no allegiance to any party or campaign”, also revealed ground-breaking figures which place a clear shelf life on North Sea production.
He said: “Based on the research and conversations within my review, and across the industry, I believe, that even with a more sympathetic tax and regulation framework, the likely best outcome, without new hydrocarbon regions being discovered, is between 15billion and 16.5billion barrels.”
The First Minister’s most quoted prediction of a further 24 billion barrels left in the North Sea is 45% to 65% too high, according to Sir Ian.
“However, much more relevant to Scotland’s independent debate is how long offshore oil and gas production will last,” he added.
“We now have a mature offshore oil and gas basin with depleting reserves, and even with everything possible being done to maximise recovery, we will be down to very low levels of production by 2050 – probably less than 250,000 barrels per day, about a sixth of our current level.
“So offshore oil and gas cannot figure significantly in Scotland’s medium term economic calculations.
“It means our young voters must be fully aware that by the time they are middle aged, Scotland will have little offshore oil and gas production and this will seriously hit our economy, jobs, and public services.
“What’s more, the rundown impact will begin to be felt by 2030, which is only 15 years from now.”
He added a “Yes” vote would ultimately curb momentum over the next three to four years – a crucial time for the industry to nail a strategic plan to maximise recovery.
The Aberdeen-born entrepreneur and philanthropist also estimated the oil and gas revenues generated from industry tax over the next five years to be 40% less than Scottish Government’s current prediction – working out to potentially £370 less for every man, woman and child in Scotland every year.
Faced with depleting reserves and costly renewables, an independent Scotland could ultimately be forced to import energy generated from onshore fields from its English neighbour.
He said: “Thus ironically, with the Scottish basin having contributed significantly in the UK’s energy reserves over the last 40 years, a vote for independence would see us leaving the UK just after the discovery of very significant shale gas reserves in England, which could make a significant contribution to the UK’s energy requirements over the next 50 years.
“This could see Scotland having to import hydrocarbons from England at significant cost to our balance of payments.”
He added: “So reluctantly, I conclude that an independent Scotland will lose out badly on our energy economics.”
Watch the full sit down interview below where Sir Ian discusses the likelihood of an oil fund, what decommissioning means for the independence debate, his conversations with operators about which way they would like the vote to swing and why more service companies need to have their say.
Watch the full sit down interview immediately below or browse our highlight clips.
Q :Why speak out now?
A: “A ‘Yes’ vote will completely change our country. There won’t be any going back and I guess the concerns I might have had about a rough ride from politicians or some fervent ‘Yes’ supporters are secondary.”
Q: What are your views on the future prospects for the UK’s oil and gas sector and the impact this will have on Scottish independence?
A: “The change will inevitably, if there is a change, will result in a significant loss of momentum at a very critical time for the industry. Really right now the industry needs to switch into maximising recovery mode and we’re ready to do that and it would be very unhelpful to have a shift there.”
Q: What are your thoughts regarding the long term oil and gas prospects?
A: “This is a vote not about us or even the next generation. This is about 300 years down the road. We must take into account the long term and long term we will not have significant offshore oil and gas reserves.”
Q: How have you felt about the Wood Review being repeatedly used as a critical piece of evidence in the independence debate?
A: “I do think the debate is being bedevilled by over optimism and over pessimism.”