Scotland 'Yes' Vote Would Trigger Dispute Over Old Oil Rigs


LONDON, Sept 12 (Reuters) - Scotland will ask Britain to help finance the cost of removing old North Sea rigs and pipelines even if it votes for independence and gains most of the oil revenues, a move that bankers and lawyers say may result in years of legal battles.

An independent Scotland would benefit from most of the new revenues from North Sea oil output - worth $50 billion a year - but it will nevertheless ask Britain to co-finance some $60 billion of decommissioning to remove old platforms and pipelines.

"Successive Westminster governments have accrued around £300 billion (in today's prices) in tax receipts from Scotland's oil and gas, and therefore the Scottish government will seek a commensurate contribution to the costs of decommissioning from Westminster," a Scottish government spokesman said.

The UK Treasury declined to comment on its position on the issue. But a Treasury spokesman directed Reuters to an analysis issued in June 2014. This said that an independent Scotland would have to invest almost 3,800 pounds (6,174.62 US dollar) per head for decommissioning, over ten times more than when the costs are spread across the whole UK.

Lawyers and bankers said that deciding who pays what will complicate investment decisions for oil companies.

"We certainly will have a dispute. The liabilities are just too large," said Andrew Moorfield, Europe-based head of origination at Canada's Scotiabank, which is among important lenders to the North Sea oil industry.

There are about 300 rigs in the UK North Sea and the cost of decommissioning is expected to exceed 40 billion pounds ($65 billion) until 2040, with expenditure peaking at 1.7 billion pounds as early as 2016, according to industry estimates.


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jimratim | Sep. 15, 2014
Surely not more scare stories fae the "warmongers", the people will speak on Thursday absolutely sick to the teeth of the millionaires taking advantage of the working classes, the times they are a changing!! Im only sooty Ill be offshore on Friday as Im going to miss the mother of all parties!! Wouldnt you be better reporting on the companies who are threatening their employees with the sack if they vote YES in the offshore sector??

Kirsty | Sep. 15, 2014
The cost of decommissioning oil and gas installations and pipelines on the UK continental shelf (UKCS) is significant. Estimates from the Department of Energy and Climate Change (DECC) put the cost at around GB£33 billion in todays prices for decommissioning the current installations that will go off-stream in the next two decades. Because of the cost, obtaining tax relief is critical in maximising return and a crucial factor in enabling participants to meet the overall cost of relief from who UK or Scotland. The Petroleum Act 1998 establishes a decommissioning regime which protects the taxpayer from bearing decommissioning costs, a UK act. ....Seriously Craig...YES or NO up before you post comments like that....This article brings up relevant concerns, none of which are made up. If you want more information just google - Decommissioning UK oil and gas installations

Craig Anderson | Sep. 15, 2014
What a load of rubbish, its the platform owners that foot the bill for removal of old rigs. Its obviously a NO voter that wrote this. Get your facts correct before you go spreading rubbish like that.


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