What Will Happen to North Sea Oil If Scotland Leaves The UK?

In the wake of Brexit, the British economy has been thrown into turmoil. The pound hit the lowest levels seen against the US dollar in more than three decades, and now, Scotland is maintaining that it wants out. The data backs these claims, with a recent Survation telephone poll revealing that 41% of Scots thought the nation should hold a second independence referendum, with 54% confirming they would vote yes.

Scottish independence – take two

While around 52% of the UK as a whole voted to leave the EU, 62% of Scotland’s five million strong population voted to stay. They were outnumbered as a country, and now First Minister Nicola Sturgeon is vying for a second independence referendum that would see Scotland depart the United Kingdom, and retain its membership to the EU. So what would this mean for the North Sea oil and gas industry?

Could a ‘Scexit’ send oil and gas giants running?

According to Andrew Speers, CEO of oil and gas recruiter Petroplan, her cause is a major cause of concern for the energy industry. One of the major issues plaguing Scotland’s bid for independence is economic instability, with the Fiscal Affairs Scotland think tank estimating that a departure would leave the nation £7 billion a year worse off. Yet with Scotland and England divided on the EU front, a ‘Scexit’ is a very real issue. In an independent Scotland, Speers maintains that opportunities would be less appealing and far more volatile, which could prompt oil firms to take their business elsewhere.

"Many of the operators and service companies with Scottish operations are global by nature and the most important thing is Scotland remains an easy and profitable place to do business," he explained in an interview with CBC.

The short term benefits

That said, in the short term an exit could prove to be temporarily positive. This scenario appears to be playing out in the aftermath of Brexit tensions, with some analysts noting that North Sea oil producers could benefit thanks to the fact that operating costs are paid in pounds, yet the product itself is sold in US dollars.

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