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The oil and gas industry welcomed the No vote in the Scottish referendum but was quick to point out the challenges facing the North Sea and its dwindling reserves.

Ben van Beurden, chief executive of Royal Dutch Shell, said the outcome had cut the risk to the company’s continuing investment in the North Sea. “Shell welcomes the decision by the people of Scotland to remain within the UK, which reduces the operating uncertainty for businesses based in Scotland.”

In the run-up to the vote, the chief executives of both Shell and BP, Britain’s two leading oil producers, backed the No campaign arguing the best prospects for the North Sea industry – a major generator of tax revenues – would be best served if Scotland voted to remain part of the UK.

BP said on Friday: “The North Sea is important to BP and we expect to be an active participant in the oil and gas industry in Scotland for years to come.”

But executives highlighted the continuing challenges facing Scotland and the rest of the UK in arresting the decline in output from British waters – a resource that Yes campaigners had argued would help underwrite the creation of an independent state.

Malcolm Webb, chief executive of Oil & Gas UK which represents offshore operators, on Friday called on the government to press ahead with a range of initiatives to tackle a collapse in North Sea exploration and encourage future field development.

He called for quick implementation of the recommendations in this year’s Wood Report, a review led by Aberdeen businessman Sir Ian Wood. These include a call for the Treasury to agree fiscal reforms aimed to encouraging investment in fields that under existing tax rules could be uneconomic to develop.

Sir Ian said on Friday that “two very important and urgently needed initiatives” recommended by his report, the fiscal review and the setting up of a new regulator, would move forward now that Scotland had voted No. “The debate has also highlighted the impact of depletion on the oil and gas industry in the medium term and certainly areas like the northeast of Scotland must begin to take this seriously,” he said.

During the campaign Sir Ian warned Scottish voters of the limits of future oil revenues. Sharply diverging views on how much oil and gas might be economically extracted from Scottish waters in the future was a main component of the campaign.

Earlier this week Wood Mackenzie, a leading industry consultancy group, also warned on further hurdles facing North Sea operators, whatever the outcome of the vote.

“Despite the current North Sea investment boom, there is an uncertain project pipeline with two principal factors contributing to this situation,” said Wood Mackenzie. “The current high cost environment has led to projects being put on hold or deferred, such as Rosebank and Bressay, and poor exploration success has resulted in fewer discoveries, and therefore fewer new projects.”

Copyright The Financial Times Limited 2017. All rights reserved.
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