It's Scotland's Oil - Reality of The Claim

Reality of The Claim

Given that Scotland is not a sovereign state, it has no effective maritime boundaries; and any claims Scotland may assert are subsumed as part of claims made by the United Kingdom. It could be argued that there is no definitive 'Scottish' sector of the North Sea in the same way there is a Norwegian sector or a Danish sector, or indeed a UK sector. However due to the existence of two separate legal systems in Great Britain — that of Scots law pertaining to Scotland and English law pertaining to England and Wales, constitutional law in the United Kingdom has provided for the division of the UK sector of the North Sea into specific Scottish and English components. The Continental Shelf Act 1964 and the Continental Shelf (Jurisdiction) Order 1968 defines the UK North Sea maritime area to the north of latitude 55 degrees north as being under the jurisdiction of Scots law meaning that 90% of the UK's oil resources were under Scottish jurisdiction. In addition, section 126 of the Scotland Act 1998 defines Scottish waters as the internal waters and territorial sea of the United Kingdom as are adjacent to Scotland. This has been subsequently amended by the Scottish Adjacent Waters Boundary Order 1999 which redefined the extent of Scottish waters and Scottish fishery limits.

Recent evidence by Kemp and Stephen (1999) has tried to estimate hypothetical Scottish shares of North Sea Oil revenue by dividing the UK sector of the North Sea into separate Scottish and UK sectors using the international principle of equidistance as utilised under the United Nations Convention on the Law of the Sea (UNCLOS) - such a convention is used in defining the maritime assets of newly formed states and resolving international maritime disputes. The study by Kemp & Stephen showed that hypothesised Scottish shares of North Sea oil revenue over the period 1970 to 1999, varied to as high as 98% dependent upon the price of oil and offset against taxable profits and the costs of exploration and development. However the application of the Convention (UNCLOS III) on baselines and the North Sea continental shelf case of 1969 is by no means cut and dried and by international convention maritime boundaries extend along the line of the land border. Looking at the Scottish English land border this heads north east from Berwick pointing towards Bergen in Norway rather than east towards Denmark as envisaged by many. A large proportion of the North Sea oil fields would under this scenario therefore belong to England not Scotland.

Nevertheless a Scottish share of North Sea oil is never formally alluded to as part of Scotland's net fiscal position and is treated by HM Treasury as extra-regio resources. The BBC economist Evan Davis however reported prior to the 2007 Scottish Parliament election that the Barnett formula already allows Scotland to sustain higher levels of per capita public spending relative to the rest of the UK, which is approximately equivalent to its disproportionatly high annual contribution of tax revenues to the central UK Treasury from Oil production. However Scotland's per capita spending growth, relative to the rest of the UK, has in recent years, been nominally reduced by the operation of the Barnett formula, in order to bring public spending levels into line with the UK average, in a phenomenon that had been dubbed the "Barnett Squeeze".