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Financial Times' investors' magazine: Westminster is playing down potential oil cash

BRITAIN'S leading investment magazine has claimed Westminster is deliberately downplaying the potential for oil and gas returns from the North Sea ahead of the referendum.

The latest edition of the weekly Investors Chronicle, published by the Financial Times group, gives its view in an article recommending readers buy shares in the independent UK oil producer, EnQuest.

Aimed at the UK's richest investors, the magazine says: "We think that Westminster has been deliberately downplaying the potential of the UK Continental Shelf (UKCS) ahead of September's referendum on Scottish independence.

"The Department of Energy has certainly been far more subdued than it was at the time of the February publication of Sir Ian Wood's preliminary findings on the future of offshore oil and gas in the UK.

"According to the report, the UK economy could generate £200 billion over the next 20 years through the recovery of only three to four billion barrels of North Sea oil and gas.

"Many analysts believe that the potential is much greater, although energy companies will need to be offered increased tax incentives to stay the course in the North Sea."

Westminster's downbeat oil forecasts have become a growing source of dispute between the Edinburgh and London governments.

The Office for Budget Responsibility (OBR) recently cut its long-term projections for North Sea revenues by one-quarter, from £82.2bn between 2013-14 and 2040-41 to £61.6bn.

It prompted Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, to call on Alex Salmond to restate his forecasts for North Sea oil ahead of the September 18 vote.

In May, the SNP Government downgraded its short-term forecasts of North Sea tax receipts to £34.3bn between now and 2018-19, but that is still more than twice the OBR figure of £15.8bn.

Earlier this month, the First Minister wrote to Alexander pointing out the OBR had assumed 10 billion barrels of oil and gas would be extracted over the next 28 years, while the industry body Oil & Gas UK estimated it at up to 24bn barrels.

SNP MSP Maureen Watt, convener of Holyrood's infrastructure and capital investment committee, said: "This is further confirmation that Westminster is up to its old tricks again.

"Once again they are being exposed for trying to hoodwink the people of Scotland.

"The oil and gas industry has a bright future ahead of it - and Westminster knows this."

A Better Together spokesman said: "Oil and gas has been great for Scotland, but the experts are clear that the remaining value is declining and very volatile.

"Being part of the larger UK means we can make the most of remaining oil and gas reserves without putting our public services at risk by being over-reliant on a volatile and declining resource."

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