THE price of oil has reached around £55 per barrel (in sterling terms) and some think it is likely to go higher next year. Since Scotland produces around one million barrels per day, this means that the present value of that oil is running at around £20 billion/year.

Now, it is also reported that as a result of all the recent cost-cutting in the production of oil in the North Sea, the present cost of production is around half its present value, meaning that – after accounting for these production costs – around £10 billion/year may be up for grabs.

It will be interesting to see what the projections for the expected UK oil revenues will be. How will UK oil revenues per barrel compare to those collected, say, by Norway, our best comparator?

We haven’t done too well in the past, and I have always wondered “why not?”

Nick Dekker