THE UK's leading offshore oil industry body has dismissed claims by Sir Ian Wood that the Scottish Government's predictions for North Sea oil recovery are too high.
Oil billionaire Wood has claimed the figure of 24 billion barrels is 45-60% too high and no more than 35 years of oil and gas production remain, without any major discoveries.
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But industry body Oil & Gas UK, which made the estimate and "remains neutral in the referendum debate", said it stood by its prediction.
The figure of 24 billion has been backed by leading oil economist Professor Alex Kemp, who told the Sunday Herald he believes the longer-term prospects are better than Wood suggested.
A statement issued by Oil & Gas UK, which describes itself as the voice of the offshore industry, said: "We note Sir Ian Wood's view that between 15-16.5 billion barrels of oil and gas may be produced from the UKCS (UK Continental Shelf).
"Oil & Gas UK, however, believes there is a broader range of possible outcomes and we remain of the view that there could be up to 24 billion barrels of oil and gas to recover."
It added: "In order to achieve the optimum result, whatever the outcome of the referendum, it is essential that both governments must work with industry and each other to maximise economic recovery of our indigenous offshore oil and gas resource."
The intervention by Wood in the independence debate came six months after he published a major review for the UK Government in February, examining how to maximise recovery of resources from the UKCS.
That report referred to the figure of 24 billion six times as an estimate of what could be produced, including a statement from Wood in the foreword that his recommendations provide the opportunity to "take us closer to the 24 billion boe (barrels of oil equivalent) prize potentially still to come".
Wood told the Sunday Herald he had not changed his position - but that he "did not do a calculation" for that report.
"My task (for the review) was how do I get to the maximum," he said. "I was aware of the fact the range was between 12 and 24 (billion) - I did not do a calculation and try to focus on what I thought the actual would be."
He said his current assessment of 15-16.5 billion barrels took into account an additional three billion barrels which could potentially be achieved through the implementation of his review recommendations, and was based on no major new regions being developed, as "right now that doesn't look likely".
But he acknowledged predicting the depth of Scotland's oil reserves was "not an exact science", and admitted it could be higher than he stated. "If you said to me is 18 (billion) possible, I would say probably just," he added. "If you said to me it could be as low as 12 (billion), I would say possibly."
Wood insisted he has no political agenda. However, his comments sparked suggestions on social media sites that his intervention may be motivated by protecting the interests of the Wood Group - the oil service firm which he founded and is still a shareholder in.
The Wood Group acquired a specialist US fracking firm in 2013 and has previously indicated it wishes to play a part in the UK shale gas industry: the UK Government issues licences for fracking. But Wood dismissed these suggestions as "absolute rubbish".
When asked about what he had based his calculations on, Wood said he had decided to scrutinise the figures following his review for the UK Government, which had involved discussions with leading figures including Oil & Gas UK and during which he had been privy to available information on oil field developments. He said he was "surprised" to hear Oil & Gas UK had maintained their assessment of the figure of up to 24 billion, adding: "I have had a lot of conversation with Oil and Gas and I don't think there is any difference between my thinking and their thinking in terms of what we are likely to recover."
Wood said he had "worked closely" with Alex Kemp, professor of petroleum economics at Aberdeen University, during his review and described him as a "guru" in his field.
But he dismissed a prediction by Kemp that more reserves will come from 125 known existing oil field discoveries, which are not commercially viable, but are likely to come into use as technology develops.
Wood said: "They will not be developed without infrastructure - frankly to suggest that would get anywhere near eight billion (extra) barrels is just not right. We won't get more than, at the most, 1.5 maybe 2 billion barrels out of that - frankly, that is stretching it like mad.
"The only way we could get anywhere near 24 billion is if there is a significant new region established with significant reserves in it."
However, Kemp, who says he is remaining neutral in the independence debate, told the Sunday Herald a potential of up to 24 billion barrels is plausible. He said modelling had shown there could be around 14-15 billion barrels produced between 2014-2050, with an additional 1-2 billion barrels if tax incentives were increased: a similar figure to Wood's estimate.
But he said there is also potential for further developments in unused fields before and after 2050, taking into account both the likelihood of technological progress and oil prices increasing from current levels.
"Our modelling shows that there are a lot of fields which are discovered but not yet developed, because they are not commercial at current level of oil prices," Kemp said.
"Where we are a bit different from Ian Wood is in saying that it is reasonable to expect technological progress from now until 2050 and even without the price (of oil) rising, we should be able to get some of these made commercial.
"If the price rises, more of them should be commercial. We think the longer-term prospects are better than Ian Wood was suggesting."
New Treasury figures published today claim an independent Scotland would face a basic income tax rate of 30% or 5% cuts to public spending across the board based on Wood's new oil and gas estimates. Treasury Secretary Danny Alexander acknowledged the amount of oil and gas likely to be extracted from the North Sea was within the range of 12 to 24 billion barrels.
He said: "There has always been a range suggested, between 12 and 24 (billion) - what the nationalists do is assume the 24 is there and some of their figures suggest even more than that might be possible.
"But in terms... of thinking about what might be possible in an independent Scotland and particularly how much tax revenue might be possible, it is sensible to take a figure like the one Ian Wood has taken.
"Not least because as all the commentators have made clear, even getting to those numbers requires an awful lot of new investment, it requires significant sacrifices in terms of giving up tax revenue to enable that investment to take place and that is why the White Paper numbers simply don't add up."
But a spokesman for First Minister Alex Salmond said: "This is fantasy stuff from Danny Alexander, whose own oil figures have been described as 'missing a mountain of black gold' by respected expert Professor Sir Donald MacKay.
"Oil is the bonus and not the basis of Scotland's economy. Without oil, our economy is on a par with the rest of the UK and, as global ratings agency Standard & Poor's said, even without the North Sea's resources, we are a wealthy country which would qualify for their 'highest economic assessment'.
"Westminster politicians have been claiming for decades that oil is a curse for Scotland and a blessing for every other country, but people are now seeing through that, and on September 18 have the opportunity of a lifetime to put Scotland's wealth in Scotland's hands."
On Friday Melfort Campbell, the chair of a Scottish government commission into the future of North Sea oil, said the 24 billion figure was an "aspirational scenario" which could be won if there was a radical review of fiscal and regulatory regimes and "improved stewardship" of the North Sea.
But he cautioned: "With current uncertainty, ageing assets, spiralling costs and the challenges of improving production efficiency and attracting investment, we will be hard-pushed to achieve the mid-range scenario of around 15-16 billion let alone the holy grail of 24 billion barrels."
Kenny Anderson, Aberdeen city leader of pro-independence group Business for Scotland, said: "There are plenty of expert assessments, including that of Professor Alex Kemp who is standing by the projected figure of 24 billion barrels of oil.
"These estimates, of course, do not take account of undiscovered reserves which with exploration continuing can be expected."
He added: "Regardless of the endless debate on the exact extent of oil and gas reserves and how much is left to discover it's the stewardship, nurturing and sustaining of all our industries, including oil and gas, that is crucial for Scotland. We can manage that better than Westminster, and focus on diversification of economy as well as growth."