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Scottish nationalists are fighting to gain support for a vote of independence that will see the Scottish government split from the United Kingdom in many areas. The uncertainty about the future of Scotland, and the potential impact this could have on offshore jurisdiction in Scottish waters is preventing North Sea oil companies from planning for the future. A survey carried out by the Aberdeen & Grampian Chamber of Commerce, and sponsored by Bond Dikcinson LLP, has found that executives from the industry claim that uncertainty over taxes, fiscal policy, regulation, and financing are making it impossible to commit to future projects.
Kenny Paton, a partner at Bond Dickinson, said that “more and more of our clients in oil and gas and other sectors are raising questions about the implications. This report provides more evidence that oil and gas businesses are concerned about the lack of information.”
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Bloomberg reports that the largest cause for concern was identified as the uncertainty over corporate and personal taxes, as well as whether or not the new independent Scotland would be recognised as a part of the European Union.
In order to garner support the Scottish nationalists have been claiming that income from the North Sea is such that the country would be better off declaring independence and keeping it all for themselves, rather than sharing it with the rest of the UK. Scottish First Minister Alex Salmond, believes that the North Sea oil industry is set to experience a boom that will strengthen Scotland’s finances.
Oil & Gas UK states that investment in the UK Continental Shelf in the North Sea is set to hit a record of $13.5 billion this year, a stream of investment that will even continue into next year. However, after that the uncertainty takes affect and companies are unable to plan any further into the future.
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The Aberdeen & Grampian Chamber of Commerce explained that “executives in the high-growth oil and gas sector feel they have a lack of clarity. They say this lack of information is hampering their ability to establish business plans beyond 2014.”
If Scotland is to declare independence, then the nationalist party will have to reverse a deficit of 20 percentage points before September next year, when the vote is due to take place.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com