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By a Newsnet reporter

One of Scotland’s most respected economists has responded to comments made by Sir Ian Wood after the retired tycoon criticised the Scottish Government’s estimate over the amount of North Sea oil still to be extracted from Scottish waters.

Sir Donald MacKay has publicly backed Scottish Government estimates on the economy and North Sea oil and said forecasts criticised by Sir Ian were backed by the oil and gas industry.

On Wednesday oil tycoon Sir Ian Wood intervened in the independence referendum and said figures used by the Scottish Government in its estimates of future North Sea reserves were too high. Sir Ian also accused others of having distorted conclusions contained in a report he himself had published in February.

However responding today, Sir Donald MacKay challenged the accusation that forecast figures had been distorted.

He said: “In forecasting output, the first source I looked at was the Wood review in which Ian Wood states that ‘a number of larger new fields are about to come on stream in the next two or three years and that could take production back to the level of two to three years ago’.

“Similar forecasts have been made by Oil and Gas UK and by Professor Alex Kemp and I have taken the former forward through my calculations.”

In a report published by Sir Ian Wood in February, the No supporter urged companies to cooperate in order to maximise output from the North Sea. His report concluded that “full implementation of the recommendations in this report … will put the UK in a much stronger position to get closer to the 24bn boe potential.”

However on Wednesday the retired tycoon appeared to distance himself from his own report and said suggestions that there were 24bn barrels of oil left were a “distortion” adding that in his view the true figure was no more than 16.5bn barrels.

The tycoon’s intervention followed criticism of the UK Government by several leading figures over what many believe to be the deliberate downplaying of the value of future Scottish oil and gas reserves.

Last month Sir Donald MacKay questioned the UK Treasury’s oil and gas forecasts, arguing that Westminster’s calculations are ill-informed and “wide of the mark”.

In an article published by the Times newspaper, Sir Donald said there was “no hole in the Scottish government’s oil predictions”.

The former Chairman of Scottish Enterprise, who also founded an oil company, criticised forecasts made by the London based Office for Budget Responsibility (OBR) for the UK Government. Sir Donald said there was a “mountain of black gold missing” missing from oil forecasts published by the UK Treasury.

In his statement today, Sir Donald repeated his criticism of the OBR and said:

“The result in output in the first five years from 2014-15 is much greater than that anticipated by OBR who, contrary to the views of the industry, predict a continuing fall in output right through to 2018-2020.

“Therefore that is a major factor in predicting much more substantial oil tax revenues than those predicted by OBR.

“The point is that Scotland will begin life as an independent nation in a better fiscal position relative to the UK. An independent Scotland should use that financial advantage to invest in re-engineering our economy towards industrial, manufacturing and trade-able services development.

“Within this fiscal framework the Scottish Government should be able to deliver the major economic programmes contained in their White Paper.”

Sir Donald was an Economic Adviser to successive Labour and Conservative Secretaries of State for Scotland for over 25 years. His views will add weight to arguments in favour of a Yes vote.

The issue of oil leapt to the front of the independence debate after reports of significant new discoveries to the west of Shetland. The Clair Ridge field has already been described by oil giant BP as “massive”.

Days after the field hit the news, another field to the west of the islands was confirmed as having the potential to generate over 700 million barrels of oil. The Bentley Field, which is due to be drilled by Xcite Energy, has up to 777 million barrels of oil reserves, the company revealed.

The discovery was describe as one of the biggest in decades and will see an estimated 57,000 barrels of oil per day produced.

Last weekend it was announced that potentially massive oil reserves off of the west coast of Scotland are to be examined after the Scottish Government announced it is to set up a review along with top academics and experts.

The area which includes the north and west coast of Shetland down to through the Hebrides and into the Firth of Clyde will be the subject of a review in order to determine the true scale of the oil and gas reserves.


Alien Act
2014-08-22 13:01

The more we talk about oil and state its importance in an independent Scotland, the more I fear the dirty, underhand tricks that westminster will use to keep it in the next four weeks.
2014-08-22 13:16

Aye, we have all that damned oil but what a shame we are the only people in the world that are not fit to use it.

I know lets just give it to westminster, they are bound to know what to do with it. Hurrah problem solved.

Our Unionist friends really think everyone in Scotland is that stupid, as for Sir Ian Wood, well whats another scare story to us, weel just put it on the pile with the others.

2014-08-22 13:58

If voters let themselves be fooled on the second half of Scottish oil, then we only have ourselves to blame.

Westminster parties have a long record of covering up the extent of Scotland’s oil wealth.
From the secret McCrone report to former chancellor Denis Healey’s own words:

“I think we did underplay the value of the oil to the country because of the threat of nationalism..”

“I think they are concerned about Scotland taking the oil, I think they are worried stiff about it.”

Fool me once..

2014-08-22 14:01

I had Ian Wood down as a Tory unionist but given his behaviour it more like that other British unionist party where black is white and viceversa depending on which day of the week it is.
2014-08-22 14:22

Why do Better Together and their fan club keep banging on about what may or may not be left in The North Sea Oil & Gas Fields while totally ignoring what has been found outwith The North Sea and what may be found in the future West of Shetland and in The Western Approaches, Clyde and Rockall areas.

Answer – It suits their agenda perfectly in that that they hope that the electorate will be daft enough to believe that what they are talking about is the total of Scottish Oil & Gas Resources.

2014-08-22 16:14

We should all try to get this to Editor The Sunday Herald. I have tried.
Jacque De Molay
2014-08-22 16:19

Sir Ian Wood is NOT an Oil Tycoon.

He is a very resourceful and smart person who adapted his company to SUPPORT the Oil & Gas industry.

I have no doubt that he believes what he said. I just do not consider him qualified to make such announcements.

2014-08-22 19:51

Yup,maybe he has gone back to fishing.
Ready to Start
2014-08-22 20:33

Don’t forget about North Sea Coal which will be the next North Sea black gold bonanza Google it and wonder why Scottish media has never reported this great energy security for 100 years and more.

Despite Unionist dirty tricks, the latest Panelbase Opinion Poll out to-night shows YES at 48% and NO at 52%.

No doubt their tactics will get more brutal over the next few weeks.


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