Scotch Mist: Should Oil And Gas Contractors Be Concerned By Squabbles Over Future Revenues North Of The Border?
On September 18th, the Scottish independence referendum will take place. A hotly contested debate has taken in issues such as currency options, education policy and the potential for EU membership should Scotland vote ‘Yes’. Somewhat inevitably, however, the discussion has focused on a perpetual economic hot potato: North Sea oil.
Scottish and UK parliamentarians have clashed over what revenue stream projections paint the most truthful picture for oil and gas extraction over the coming decades. Stewart Davis, Group CEO, Umbrella.co.uk’s gave us his thoughts on what contractors should be looking out for as the debate rages on: “The most recent dispute between Westminster and her Scottish detractors has revolved around what Scottish ministers and ‘Yes’ vote campaigners see as unnecessarily pessimistic projections for oil and gas revenues.”
“The Office for Budget Responsibility (OBR) believes that nearly £62billion will be raised via oil and gas extraction between now and 2040. That falls well short of the £365billion pro-independence think tank N56 could be raised in a similar timescale. Their estimate is subject, they say, to undertaking infrastructural changes, tax exemptions and a fundamental shift of overall business and policy management to Aberdeen.”
“Such opposing economic forecasts have created confusion amongst oil and gas professionals. Unfortunately the by-product of political football around any issue is the distortion of genuine fact, and the injection of politically leveraged fiction.”
“The reality is that the North Sea is a matured oil and gas resource. That doesn’t necessarily mean that the OBR’s forecast carries more weight than that of N56. Both estimations are, as mentioned, very coloured politically.”
“What many contractors should focus on is the immediate future for their job expectations and salary levels, both of which are improving. The quality and unique skills of contractors working in the oil and gas sector has seen a surge in day rate levels that has captured media attention. Recently contracting day rates in oil and gas surpassed £1,500 per day in certain roles.”
“Quite rightly oil and gas professionals will be watching the ongoing debate closely. The vote is drawing nearer, and the direction Scotland takes will greatly impact the future of the oil and gas industry in the UK. Until then, we can expect to see the North Sea stuck in the middle of a tug of war, with the winner set to keep the spoils. Either way, contractors can say they are sitting fairly prettily right now.’’
Umbrella.co.uk is a trading name of Umbrella-Company Ltd. Umbrella-Company Ltd are a APSCo Affiliate, Professional Passport approved and are silver business partners with the Institute of Recruiters (IOR). For further information please contact umbrella.co.uk on 0800 121 6513.