MUCH has been made of the value of an industrial offshoot of North Sea oil and gas that could be worth billions to the Scottish economy.
Instead, we – as UK taxpayers – face having to pay about half of the £70 billion cost of decommissioning the 600 or so installations in the North Sea that will be run down or dismantled over the next half-century.
Today, in the third of his six-part series The Great Oil Swindle, the industry’s enfant terrible Professor Alex Russell examines the tax relief available to oil companies when they decommission their offshore assets, and concludes that the UK Treasury may well be giving away Scotland’s oil for free.
Over the years, it has been generally accepted that oil companies will meet their obligations to restore the seabed to its original condition – or as close as can be expected – when they have finished drilling in any particular region.
However, Russell says the UK Government actually pays the oil majors to decommission their installations, even if they simply shear off the topsides and ship them abroad for dismantling and recycling, leaving the giant legs – some the height of the Eiffel Tower – on the seabed.
He argues that Holyrood should have “direct control” over all economic activity in its territories, including decommissioning, which should be “undertaken in Scotland”.
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