An Oil Fund for Scotland: Taking forward our National Conversation

DescriptionAn Oil Fund for Scotland forms part of the next stage of the National Conversation. The report looks at oil funds established in other countries and considers the economic rationale for creating a similar fund in Scotland. It also presents a range of models on how annual or one-off investments could provide a sustainable source of income to support the economy.
ISBN
Official Print Publication DateJuly 2009
Website Publication DateJuly 30, 2009

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ISBN 978 0 7559 8119 9

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The Foreword and Executive Summary are also available in Gaelic

Contents

Foreword
Executive Summary
Chapter 1 Introduction and Overview
Chapter 2 The UK Oil and Gas Sector
Chapter 3 The Purpose of an Oil Fund
Chapter 4 International Experience of Oil Funds
Chapter 5 Policy Issues for a Scottish Oil Fund
Chapter 6 Conclusions

List of Figures

The UK Oil and Gas Sector
Figure 1: UK Continental Shelf and Scottish Boundary
Figure 2: Scottish Geographical Share of Oil and Gas Production 2000 to 2008
Figure 3: Scottish Estimated Geographical Share of Oil and Gas Production 2009 to 2013
Figure 4: Oil Prices 1977 - 2009 ( GBP and USD Per Barrel) (2008 Prices)
Figure 5: Oil Prices 2009 ( GBP and USD Per Barrel) (2008 Prices)
Figure 6: Gas Prices 1977 - 2009 ( GBP and USD Per MMBTU) (2008 Prices)
Figure 7: Forecasts of Future Oil Prices 2009
Figure 8: World Oil Prices (1980 to 2030) (2007 Dollars per Barrel)
Figure 9: North Sea Revenues 1980-81 to 2008-09 (2008 Prices)

The Purpose of an Oil Fund
Figure 10: Hypothetical Value of a UK Oil Fund - Investing 10% of Nominal North Sea Revenue Annually
Figure 11: Hypothetical Oil Fund Value - One Off Investment of £1 billion
Figure 12: Hypothetical Oil Fund Value - Investing £1 billion a year for 10 years with no withdrawals
Figure 13: Hypothetical Oil Fund Value - Investing £1 Billion a year for 10 years with Withdrawals

International Expierence of Oil Funds
Figure 14: Norwegian Government Revenue from the Petroleum Industry, NOK Billion 1970 to 2008 (2008 Prices)
Figure 15: Value of Norwegian Oil Fund (At Start of Year) NOK Billion 1997 to 2015 (2008 Prices)
Figure 16: Alaska Crude Oil Production (Thousand Barrels): 1973 to 2008
Figure 17: Alaska Petroleum Revenue (1970 to 2008) (2008 Prices)
Figure 18: Alaska Permanent Fund Value (1978 to 2009) (2008 Prices)
Figure 19: Alberta Non Renewable Resource Revenue (1970-71 to 2008-09) (2008 Prices)
Figure 20: Alberta Heritage Savings Fund Value (1976-77 to 2008-09) (2008 Prices)

Policy Issues for a Scottish Oil Fund
Figure 21: Structure of Alaskan Permanent Fund
Figure 22: Structure of Norwegian Oil Fund
Figure 23: Portfolio Allocations of Selected Oil Fund
Figure 24: Alaska Permanent Fund Dividend Per Resident (1982 to 2008) (2008 Prices)

List of Tables

The UK Oil and Gas Sector
Table 1: UK Continental Shelf Projected Reserves (Billion boe)

The Purpose of an Oil Fund
Table 2: Value of Oil Fund in 2008-09 with an Annual Nominal Return of 3%, 5% and 7% (£ Billion)
Table 3: Value of Investments with an Annual Real Return of 1% (£ Billion - Constant Prices)
Table 4: Value of Investments with an Annual Real Return of 3% (£ billion - Constant Prices)
Table 5: Value of Investments with an Annual Real Return of 5% (£ billion - Constant Prices)
Table 6: Value of Investments & Total Income Withdrawn with an Annual Real Return of 1% (£ Billion - Constant Prices)
Table 7: Value of Investments & Total Income Withdrawn with an Annual Real Return of 3% (£ Billion - Constant Prices)
Table 8: Value of Investments & Total Income Withdrawn with an Annual Real Return of 5% (£ Billion - Constant Prices)

International Expierence of Oil Funds
Table 9: International Examples of Natural Resource Funds (2009)