It seems only a few months ago that the SNP were telling Scots that their financial security after independence was assured because of oil revenues. In their now laughable analysis, they set out a range of incomes to the Scottish Treasury arising from direct taxation of oil profits, which they forecast would amount to anything between £31bn and £58bn in the five years to 2018. The more optimistic figure was based on higher levels of production but also on oil price levels starting at $113 a barrel rising to a price over $135,
How does that look now? Well I don't have their detailed numbers, but I do have a current oil price of $60 a barrel give or take the odd groat, the fact that Scottish oil and gas production was a little under the equivalent of 2 million barrels a day in 2010 (actually 670 million barrels equivalent in the year). The marginal corporation tax rate for North Sea oil profits is 60% (I'll ignore PRT-paying fields to be conservative) and forget the fact that production is likely to be lower if the oil price is lower.
So that means they will be short of their estimate by about 670 million * $50 /1.5 ($/£) *60% for the next 5 years, which I calculate means that of their £58bn forecast, they will lose £71bn or thereabouts. No wonder Alex Salmond switched to Westminster.
Further reading: North Sea crisis on the BBC
