The amount of oil that can be taken from the North Sea is less than half the estimates cited by the SNP ahead of the 2014 independence referendum, according to a leading expert.
Professor Alex Kemp, of Aberdeen University, has produced a study that suggests nearly 11 billion more barrels of oil equivalent (boe) is deliverable at so-called “lower for longer” prices.
The Scottish Government’s white paper on independence referenced Oil and Gas UK figures that said 24 billion barrels were recoverable. Former First Minister Alex Salmond also rubbished lower figures used by the UK Government at that time.
Andrew Wilson, the former RBS economist who is chairing Nicola Sturgeon’s growth commission, said on Monday that his group would assume no cash return from the North Sea in its work building the economic case for independence ahead of an expected second vote.
He also said such expected income was “a basis” for the financial plans of the 2014 Yes campaign, despite former First Minister Alex Salmond arguing it was a bonus.
Analysing prospects for activity in the region to 2050, petroleum economics Professor Kemp and research colleague Linda Stephen highlighted nearly 7 billion barrels of “remaining unexploited potential”.
Professor Kemp said: “The very large unexploited potential indicates both the challenges and opportunities facing the industry.
“Development of the unexploited potential would also greatly enhance the fortunes of the supply chain.”
Murdo Fraser, the Conservative shadow finance secretary, said: “This is a significantly lower estimate than anything the SNP said, which cast more doubt on the nationalists’ integrity during the 2014 campaign.”
Parties across the political spectrum have argued for greater support for the oil and gas industry ahead of Wednesday’s Budget .
However, Alexander Burnett, Scottish Tory energy spokesman, has argued the industry doesn’t need further tax breaks from the Chancellor.
An SNP spokesman said: “Instead of rejoicing in the downturn affecting the North Sea oil industry and the jobs affected by it, the Scottish Tories should be lobbying for support for the industry in this week’s UK Budget.
“But instead, the Tory energy spokesperson at Holyrood has, almost unbelievably, revealed his party’s plans to abandon the oil and gas sector.”
Meanwhile, Philip Hammond will announce plans to examine tax breaks to boost the decommissioning industry.
The Chancellor will confirm that a panel of experts will be established to consider the issue when he delivers his Budget to MPs on Wednesday.
Their views will help the government consider options to aid the industry.
Decommissioning is a key part of the Tay Cities Deal and it is thought the sector could potentially provide thousands of jobs for the local area.
Mr Hammond is expected to give an upbeat assessment of the future of the British economy, despite looming uncertainty over Brexit.
Despite calls from Labour and the SNP to ditch austerity, he will say a strong economy is built on resilience and pledge to continue with “difficult decisions” on tax hikes and spending cuts.
Derek Mackay, Scotland’s Finance Secretary, called for a reversal of the UK Government’s austerity plans, an end to welfare cuts and further immediate support for the oil and gas sector.
He said: “We need to see investment and support for economic growth from the UK Government at a time when Brexit poses a self-inflicted and unprecedented risk to the UK economy, public finances and consumer confidence.
“The cuts already planned by the UK Government mean that by 2019-20, the Scottish Government’s discretionary budget will be £2.9 billion (9.2%) lower in real terms than it was in 2010-11. Any change in spending must be seen against the context of the huge cuts we are already facing.
“A particular issue for both Scotland and the UK is the future of the oil and gas industry. We have repeatedly called on the UK government to take steps to incentivise investment and maximise economic recovery.
“It is encouraging that the UK Government has finally listened to the Scottish Government about the failings of the decommissioning tax regime.
“This is an area where we have repeatedly called for reform and which the UK Government have been slow to react, therefore it is important that this group comes to a swift conclusion and is not simply another talking shop.”
John McDonnell, Labour’s Shadow Chancellor, vowed to do “everything we possibly can” to help the oil and gas industry.
He acknowledged the “suffering” experienced in the north-east and further afield as a result of the downturn.
Asked whether Labour backed calls for reform to the decommissioning tax relief system enabling relief to be transferred upon the sale of an asset, he said the party was not yet committed to any specific proposals.
But he insisted these issues would be considered at Labour’s forthcoming economic conference in Glasgow.
He said: “We want to do everything we possibly can to help the industry. We know the suffering that is being caused.
“We have made it a point of principle we will do everything we can to protect people.”
Mr Hammond received an eve-of-Budget boost as a leading international think tank upgraded its forecasts for UK economic growth.
The Paris-based Organisation for Economic Co-operation and Development (OECD) said it now expected growth of 1.6% this year – up from the 1.2% it was predicting in November.
