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SNP: indy Scotland will get oil bonus, but it won't be basis for economy

THE SNP Government will this week reiterate its belief that an independent Scotland will be in line for an oil boom.

The First Minister will launch a paper citing industry figures that North Sea oil production will rise by 30% to hit two million barrels a day by 2017.

Alex Salmond's spokesman said yesterday that North Sea oil provides six times Scotland's needs.

He said: "It is estimated there is £1.5 trillion or more still to come from the North Sea – and 98.8% of oil still to be extracted is in Scottish waters."

The paper will also highlight that the oil industry has already committed £100 billion to future investment in the North Sea.

Mr Salmond said oil revenues would be a "bonus", but not the basis of the economy in an independent Scotland, which would be less dependent on oil reserves than Norway.

"It will be a bonus. If oil is taken out of the equation, then Scotland's economic output per head is almost identical to that of the UK. The benefit we get from oil and gas will be a huge bonus."

The Office for Budget Responsibility recently predicted a downturn in oil and gas production, down from 0.4% of the UK economy to an almost negligible 0.03% by 2040.

A Treasury spokesman said: "Scotland has a thriving oil industry that plays a key role in the UK economy. The UK is supporting the industry to extract every last drop of oil through decommissioning, tax reliefs and field allowances, which provide a more certain environment in which to invest.

"But this support costs money and combined with increased costs of production means that tax receipts are set to decline.

"Credible, independent forecasts like the OBR's show that oil revenues are set to decline to £56 billion over the period from 2017-18 to 2040-41. This would leave a significant gap in an independent Scotland's finances.

"Scotland is better off dealing with a volatile resource like oil as part of the larger UK economy, where it is easier to manage both the fluctuations and the projected decline in revenues."

A spokesman for the First Minister countered that Westminster government departments had consistently underplayed the value of oil, with the production information from the Department of Energy & Climate Change "varying significantly" from industry figures.

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