The First Minister, Alex Salmond, gave the Keynote Address at a launch event to mark the publication of a new book, The Official History of North Sea Oil and Gas, last night (Monday October 24)
The landmark publication is written in two large volumes by leading oil and gas economist Professor Alex Kemp, of the University of Aberdeen, using previously untapped British government records, and provides a new, unique, in-depth analysis of the development of UK policies towards the North Sea oil and gas industry from the early 1960s to 1993.
In the preparation of the study Professor Kemp was allowed full access to all UK government departmental records including those covered by the thirty-year rule. These include the Prime Minister’s papers, and Cabinet and Cabinet Committee papers as well as departmental records. He also acquired access to some privately held records and obtained oral testimony.
The second volume of this significant work examines key strategic decisions over the period including:
· the thinking within government on how the role of the British National Oil Corporation (BNOC) and British Gas Corporation (BGC) should be incorporated into the private sector
· the planning behind the formation of Britoil, Enterprise Oil, and the privatised British Gas
· the many changes in taxation following the major fall in oil prices in the 1980s
· the thinking behind the decision to abolish Petroleum Revenue Tax(PRT) on new fields in 1993
Professor Kemp, whose latest forecast on the future of North Sea oil suggests that a further 15 – 25 billion barrels of oil equivalent could be produced over the next 30 – 40 years given appropriate policies and response by investors, says there are many lessons to be learned from examining in detail the history of the industry.
“The Official History could play an important role in informing future policy decisions regarding the issuing of licences, appropriate taxation for changing operating conditions, and the formulation of decommissioning and safety policies, he added.
“In Volume 2 I examine the attempt of the UK government to help British industry increase its share of the large offshore market for platforms, equipment, and materials required to produce the oil and gas.
“The study highlights the efforts of the Offshore Supplies Office (OSO) and the mixed response of British industry to the opportunity.
“The evolution of health and safety legislation since 1964 is examined in detail. The inadequacies of the early regulations and the apparently slow rate of legislative response to accidents are identified. The legislative position before and after the Piper Alpha disaster is discussed in detail.
“The evolution of policy towards decommissioning is discussed in depth. The thinking within government relating to the extent of the obligation, the financial liability issue, and tax relief for the large costs involved is discussed. These remain live current issues.”
In addition to its role as a fund of experience for future use by policy makers, The Official History will act as a prime source for historians, particularly in regard to the remarkable effects of the North Sea on the economy of the North East of Scotland.
The release of the book has been welcomed by First Minister Alex Salmond. He said: “The Official History of North Sea Oil and Gas provides a unique analysis of UK Government policies towards the North Sea oil and gas industry from its early days. Using unreleased Westminster records, Professor Alex Kemp reveals why the Treasury opposed devolution for Scotland in the 1970s and casts doubt on whether the UKGovernment understood the purpose and operation of an oil fund.
“In this essential book, Prof Kemp predicts that the life of the North Sea fields could extend beyond 2040, a forecast confirmed in the recent announcement about the Clair field. With 40 per cent of oil and gas reserves still to be extracted, and around half of the revenues yet to be generated, it is vital Scotland benefits directly from its own resources. Scotland’s oil has already provided more than £300 billion in tax to successive UK Governments, with revenues to the Treasury set to rise by more than third over the next five years compared to the last five.
“An independent Scotland will be able to make the most of these massive revenues, but in the short term the UK government needs to give more certainty to the industry and restore confidence that has been badly dented by the Treasury's hike. Indeed, if it had not been for that budget blow, it would be at the centre of an unprecedented boom in jobs and investment. Perhaps the UK Government will now use Prof Kemp’s books to repent for their previous actions on mismanaging the North Sea’s riches."
The Official History of North Sea Oil and Gas is published by Routledge and is available from www.routledge.com/books/details/9780415570947/
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