Oil a factor in Scottish referendum

Feb. 1, 2012 at 7:09 AM
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LONDON, Feb. 1 (UPI) -- The bid for Scottish independence from the United Kingdom could be a concern for an oil and natural gas group, the British energy minister said.

Scotland aims to have a referendum on independence as early as 2014. British Energy Minister Charles Hendry, in a letter to U.K. Oil and Gas Chief Executive Malcolm Webb, said the referendum could be problematic for the energy sector.

"I am aware that the upcoming referendum on Scottish independence is a point of uncertainty that could cause concern to your members," Hendry was quoted by The Guardian newspaper in London as saying.

Oil and natural gas reserves in the North Sea are expected to generate around $88 billion in revenue during the next six years. Scottish First Minister Alex Salmond said Edinburgh would take control more than 90 percent of the oil and natural gas fields in the North Sea if Scotland gained independence.

Hendry said an upcoming licensing round for North Sea acreage is evidence that there are "many billions of barrels" of oil yet to be extracted from below regional waters. A spokesman for the Scottish finance secretary, however, said London was costing the energy industry around $3.1 billion in a "smash and grab" tax raid on North Sea assets.

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