Relax, you can safely ignore BP’s “warnings” about the impact of Scottish independence

4 February 2014

Why, a Tory grandee asked me recently, won’t more businesses come out against Scottish independence? It was, in his view, axiomatic that independence would be bad for businesses north and south of the border. So why the silence?

Perhaps, or at least in part perhaps, because when businesses do raise their concerns they often contrive to present themselves as hopeless chumps. I am sure Bob Dudley, chief of BP, is personally committed to Britain but the idea, as expressed in an interview with the BBC, that Scottish independence creates “big uncertainties” for his business is poppycock.

Well, a kind of poppycock anyway. It would require BP to operate in another country and I can see why the petroleum giant would be happy to stick with the familiar status quo. But since BP is a global behemoth capable of operating around the world it does not seem improbable that it might be able to make the best of whatever disadvantages or inconveniences follow Scottish independence.

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And, really, it is temporary and, in the grand scheme of things, minor inconveniences that we are talking about here. BP isn’t going to leave the North Sea, not while there’s still plenty of money to be made there it isn’t. And even if it did some other oil company would almost certainly take its place.

So this is silly. Indeed, you can make a plausible case that BP should actually welcome Scottish independence. The oil companies will have much more influence in a country in which they contribute approximately 15% of GDP than in one in which they account for 2%. In other words, if they won’t be able to write their own tax and regulatory regime they will have, shall we say, some considerable input into those arrangements.

The idea these uncertainties could not be resolved in some satisfactory fashion insults the intelligence of any future Scottish government and, just as significantly, BP itself. If this is crippling uncertainty then god help us all. The oil business, after all, is always an uncertain business and yet, despite that, BP soldiers on. Pluckily.

Anyway, if you are looking for a company that really might leave Scotland should it find independence awkward then that firm is the Royal Bank of Scotland or, as it would henceforth be known, RBS. But that’s a conjecture for another day.


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Show comments
  • Man

    You should read Politics and the English Language- “it does not seem improbable” is a silly sounding sentence. Also, your argument is silly. This whole thing that Nat’s do whenever a company/person/institution comes out against them of saying “This is poppycock, everything will be the same after Independence, why would anyone possibly want to leave Scotland?” Is a) foolish, b) patronising and c) makes the case for remaining in the status quo all the stronger.

  • itdoesntaddup

    BP already has sold up most of its Scottish interests. Grangemouth refinery and petrochemical complex belong to INEOS (who nearly shut them last year), sold out of almost all its Forties System production interests, and simply retains the pipelines and processing plants and a few mostly recent fields. It’s just 5% of BP’s worldwide production.

    As they say themsleves:

    In the past two years, we have refocused our portfolio. We have sold
    our interests in those assets that no longer fitted with our strategy…

    Our portfolio today is smaller

  • Tony Collins

    2% and 15% of UK and Scottish GDP respectively is a massive over-estimation of BP’s presence, given the number of other firms operating in the North Sea. I think you meant to quote those figures as the total proportion of Oil and Gas to our GDP numbers.

  • FF42

    Businesses are used to dealing with situations as they find them. They put up with the negatives and try to exploit the positives. No company will pull operations out of Scotland because of independence.

    But if you ask the question whether businesses would benefit from independence, the answer in almost every case is, No. There are several significant potential negatives in leaving the Union with no corresponding positives. These include currency uncertainties and conversion costs, the splitting of a single market, dealing with more than regulatory system, management of pension schemes.

    • ChuckieStane

      FF, “no potential benefits”? Is this is as good as it gets?
      Sir Ian Wood, for example, has recently highlighted the grave risk of the North Sea failing realise its full potential by regulatory failings in the UK sector. As offshore oil would be much more significant to iScotland it is logical that a Scottish government would much more likely to heed his advice which could cut costs, encourage more exploration in difficult, far-flung areas of the sea, boost jobs and raise revenue.
      Companies like BP will carry relatively much more clout with an iScotland than the UK and how they use it may not always be to Scotland’s advantage. It is certainly possible, however, that Scottish regulation could be to the mutual benefit of both the industry and the nation.

      • FF42

        The suggestion is that BP in particular would get better treatment in an independent Scotland because the oil sector is relatively more important. Possible, but not necessarily so. Overall, BP doesn’t seem to rate that as highly as the extra costs and currency concerns that apply to all businesses. Bob Dudley, CEO of BP flagged up his opposition to independence in his interview linked above.

        • allymax bruce

          I think there’s a lot of ‘horse-trading’ going on here with BP, Westminster propaganda, MSM Westminster bias etc; BP recently sold its half share of Rosneft, to Rosneft, now BP are looking to ‘invest’ in Canada; of which, the Westminster Gov’ have huge legislative powers in their waters. So, if I was guessing, I would say the scaremongering coming from Dudley is baseless, and purportedly a ‘favour’ traded.

          • FF42

            Hmm. More likely they are opposed to independence because they actually think it will hurt them. It may only be a bit in the case of BP, more in the case of other companies, But the downsides are real, as I have pointed out.

  • Project Hope Over Fear

    What exactly is Project Fear trying to tell us?

    Oil is traded and paid for in US dollars in every nation that BP trades in so it wouldn’t matter if Scotland used the Scots Merk as that has no effect on BP’s trading in Scotland’s oil.

    The Scottish regulatory system for oil and gas is already in place as a share of the UK’s with a substantial outpost in Aberdeen so there would be no additional costs unless Dudley is fearful of a tightening up of regulation in an industry where BP hasn’t exactly got a very good track record e.g. Gulf of Mexico oil spill.

    Like any oil company BP follows the oil and operates in numerous nations across the world and aren’t going anywhere as long as oil and gas remains off Scotland’s shores for the next 50 to 100 years according to various estimates hence why they are spending £10 billion at present in developing new oilfields off Scotland.

    This is nothing but A Project Fear scare story to try and scare Scots into voting NO so that the bankrupt Westminster run rUK economy can continue to plunder Scotland for another 100 years.

    • Pochy

      I think the BP oilman is trying to say that his business would fare better with a United Britain rather than an independent scotland. Better Together had nothing to do with it.

  • ChuckieStane

    Mr. Massie thankfully injects some sanity to the fevered BP non-story.

    Last night was perhaps the first time other than the major events (Edinburgh agreement, White Paper) that the main BBC new bulletin has led with an Indy story. If this was supposed to be a killer blow it was pretty weak. What Mr. Dudley said was a fairly innocuous and obviously unscripted remark about Britain being great and not drifting apart.

    His more substantive point about uncertainties was a bland statement of fact – yes there are uncertainties over currency. The Yes campaign have proposed a currency union, Westminster have suggested that there might not be one, Carney has said that there could be but nobody has said that there won’t be. Cameron and Milliband can clear that one up today by stating that there will be no currency union. Of course they will say no such thing.

  • classieview

    I think it makes perfect sense to play to the Nationalist gallery here. Upon the morrow of independence, the torchlit mob, descending on treacherous collaborationist households with scythes and muskets, might simply decide that you and the founder of the Massie journalistic dynasty, deserve clemency and should be allowed to die peacefully in your beds.

    • AtMyDeskToday

      The medicine is not working, see your Doc soon.

  • BarkingAtTreehuggers

    The 15% interjection is a valid point. IF things got out of hand the SNP would no doubt consider nationalising the asset.

  • Jambo25

    Not all that long ago I spent a rather boozy evening with a very senior BP manager. From the conversation we had a number of things became apparent. 1) There’s rather more product left in the North Sea than HMG has been letting on about. Can you believe that? 2) The N East Atlantic looks like it could be a very big deal indeed. 3) BP , as a company, couldn’t give a toss about Scottish independence or otherwise. Oil is priced in $US. 4) BP investment in the North Sea and N East Atlantic is high and will remain so. After their well publicised problems in the USA and Russia they don’t have too many other alternatives.

    • scotcanadien

      Do you mean the North West Atlantic

      • DougDaniel

        I suspect he means the Claire oilfield around Shetland etc. I don’t think anyone’s even begun on the NW shore yet.

        • Jambo25

          The North East Atlantic is the portion of that ocean off the West coast of Scotland and West of the Northern Isles. Initial research has taken place and results look very promising but you are right DD companies are nowhere near commercial exploitation yet.

  • Thepnr

    Regarding RBS, since it’s already 80% owned by the UK government, with Independence during negotiations I would like to see all RBS activities based in Scotland kept in Scotland. I’d be happy for the rest to remain under Westminster ownership.

  • In2minds

    Precis, business people are stupid?

  • asalord

    Well said,Mr Massie.
    First we had a rich American lecture us on uncertainties,and now this!
    Independence is assured.

  • allymax bruce

    I think Scotland, AND rUK will prosper ‘under’ an iScotland; the 21st century impetus to look anew at how business is run, is now being shown by the SNP, that iScotland can do it different, and in a lot of places better! This will allow the rUK to learn and adapt to a Modern Marxist Capitalist business market. An Independent Scotland is good for all!
    My biggest worry is that the Labour Party in Scotland ignore this new way of business, and revert our Scotland back to its old useless trougher/greed Common Purpose ways of ‘doing business’; you know, illegal wars, shaking hands with Gadaffi, and letting other countries feast on our National assets, etc!

    • monty61

      Fear? Isn’t a actively redistributive socialist state Wee Eck’s main sales pitch?

      It’s no co-incidence support for going it alone is concentrated among, shall we say, low information voters.

      (There are some well educated dreamers as well, of course before the pack descends – but the numbers show support disproportionately clustered in the handout brigade).

      • ChuckieStane

        Monty displays the fundamental dichotomy within the thinking of many opponents of indy. They are adamant that Scotland is a supplicant nation surviving only on the beneficence of its larger neighbour yet also adamant that that those who wish to end the current arrangement are motivated by the desire for benefits. By definition, those for a Yes vote are against dependency.

        Monty’s other point regarding “low-information” voters could not be further from the truth. Of the committed No voters I know virtually none have given the issue any serious thought. “I won’t vote for Salmond”, The English wont’ let us have any oil” and “I’ve always voted labour so I’m a no” are true all quotes I have heard. Those that have given the issue serious thought (including myself) have come across to support indy. I have not met or heard of a single person that has changed opinion to No voter.

        • monty61

          Sorry to disappoint Chuckie but ‘my mates’-type anecdote isn’t data. Support for going it alone is hugely concentrated among left wing SNP voters from currernt and former Labour areas, poll after poll has shown this.

          Post-independence this trougher mentality would be looking for its bounty … the chances of Scotland becoming the low-tax, enterprise-nurturing dynamo Ally wants to see are efffectively zero. The Milky Bars are on Wee Eck is the message to this lot.

          And where did I write any of the guff you attribute to me about supplicance and benificence? All in your heid I’m afraid.

          I’m well aware of Scotland’s positionas the third most prosperous area of the UK (after London and the SE), some of that is on the back of the distortions of the Barnett forumula but by no means all – Scotland has a lot going for it I just don’t want a bunch of lefties (SNP + Lab + Lib + other more extreme nutters let in by PR) to trash the place with even more free handouts for all and big hikes in taxes to pay for it.

          • allymax bruce

            ” the chances of Scotland becoming the low-tax, enterprise-nurturing dynamo Ally wants to see are efffectively zero.”
            Well, monty61, we’ll just huv tae wait n’ see; nobody knows the future. However, if SNP’s ‘record of performance’ is anything to go on, then I would say Scotland’s economy has GROWN, (I think it’s 1.3% year-on-year) since SNP were elected to run our country in 2007. In an iScotland, we could do even better; we wouldn’t have Westminster stealling all our money/resources, and curbing our growth potential. And, it certainly beats Labour self-servers like Herod McConnell giving £1300,000000.00 of our money, to Westminster as ‘Lord’ status sweetners!

          • Malcolm Kerr

            Monty. You would get more respect for your views if you could avoid the unnecessary playground name-calling. ‘Wee Eck’ is FM as a result of the party he leads winning an election. It’s called democracy. If you have any better ideas, let’s hear them. Campaign for another party, but don’t get all confused about what the referendum is about – improving democracy.

            • monty61

              Maybe you are too young to have been brought up with the Sunday Post but personally I find the resemblance uncanny.

              Oh and if there was any democracy in this referendum I’d have a vote rather than being excluded on the grounds of being unlikely to vote Yes (ie, currently working in England therefore having a positive view of the union).

              The SNP is threatening to make me a foreigner in my own home, without me getting any say in the matter.

              Democracy? Don’t make me laugh.

              • Malcolm Kerr

                I don’t think you’ll be a ‘foreigner’. You can choose to live somewhere else, and choose to return. I know people living in mainland Europe now, for example, retiring to Spain. Nobody calls them ‘foreigners’. It seems to be a term reserved exclusively for the referendum debate. Your speculation about my age is very kind, by the way!

              • Michael_Mooney

                ..and not only are you not allowed to vote because you don’t live in Scotland, hundreds of thousands of English natives are, just because they happen to live here. All of them bribed by state handouts to stay, obviously

      • Irene Buchan

        I am for going it alone and in no way am I in any of the categories you mention. Even if I was, I am sure I live in a democratic country where each person’s vote is as valid as the next. I also find your post insulting and rather puzzling…I wonder what category you come under.

        • monty61

          To repeat, anecdote is not data. Individuals apart, the fact remains remains poll after poll shows SNP support is concentrated among the ill-educated in the C2 and D demographic in left-leaning areas.

          A vote to break up the UK is therefore highly unlikely to spark the rebirth of the Enlightenment spirit, what we are far more likely to see is the dead hand of benefits dependency, Putinesque crony-capitalist subsidy, and socialist market interference, paid for (before the gravy train hits the buffers) by high taxes, both personal and corporate.

          • MichtyMe

            Hmmm, the SNP heartlands of Aberdeenshire and Perthshire and me thinking they were concentrations of the prosperous bourgeois.

      • Michael_Mooney

        “The handout brigade”. Take your classist, snobbish, condescending rubbish out of the room, please. It stinks up the place.

  • weescamp

    Good summary Alex. Particularly like your point about RBS. Coincidentally some friends and I were discussing this over a venison stew last weekend. We concluded that given RBS’s behaviour and culture that actually we should probably encourage them to leave because we need banks that will work with govt and industry to grow and broaden the economy and that’s something RBS seem to find difficult to do.

    • Martin Adamson

      Because that worked so well for Ireland.

  • MichtyMe

    Yep, that’s about it, just a wee quibble on describing BP as a behemoth. The behemoths in oil are the state National Oil Corporations which control over 90% of the reserves and the International Oil Companies like BP are the scavengers on the sidelines. I wonder if Mr Dudley in his worst nightmares ever imagines that Salmond and his Government would ever beat up BP like the yanks did over that Mexican Gulf business.

    • HenBroon

      Do you mean Statoil? We once had Britoil, based in Glasgow untill the Tory’s asset stripped Scotland.
      The Yanks went for BP to cover the fact that it was their own indigenous engineering that failed in the GOM. It was there wellhead engineering that caused the disaster.

  • Alister Rutherford

    Re the Royal Bank of Scotland, is that not already RBS Group, which self identifies as a global banking and financial company? How much of its business is actually carried out in Scotland?

    • FranzFerdinand

      Approximately 10% the remainder in the rUK.
      Given the precident set during the crash, Banks are bailed out in proportion to where the company brass plaque is based but on where the business is.
      See Fortis (Bailed out pro rate between France/Belgium & Luxembourg)
      See Daxia (as above)
      See the umpteen British banks bailed out by the Fed specifically Barclays and RBS in relation to their US interests.
      In other words, IF Scotland had been independent in 2008, it would have had to bail out 10% of RBS, rUK would have had to bail out the remaining 90%.
      Of course we are told that the Banks will never be allowed to fail again and that measures have been taken to ensure this.

      • MichtyMe

        Yes and 100% regulated in London. And if Scotland, in 2008, had been independent, is it likely that RBS would have developed and existed in the form that it did.

        • Wessex Man

          You have a very short memory, congrats from Alex Salmond on dodgy deals, Arcs of Success etc etc. The 100% regulations imposed on banking from London by a Scottish Prime Minister and Chancellor.

          You’d need a heart of stone not to laugh at your memory!

          • Crying out loud

            Someone not like reality?

            • Wessex Man

              I think that ArthurSparknottle neatly answers your silly little aside!

              • Crying out loud

                So does Wessex mean wanker from essex?

              • Crying out loud

                So what does the W in Wessex mean anker from essex?

                • Wessex Man

                  Well it obviously stands for wonderfully well educated compared to a half wit like you.

              • Crying out loud

                I was doing your wife the other day, doggie style in the dark as she was born ugly and has let herself get fat.

          • MichtyMe

            Alex did not bestow honours nor have Goodwin as an official government advisor, as Westminster did, up to 2009 .

            • ArthurSparknottle

              Salmond and Swinney in letters to Goodwin on the takeover by RBS of ABN Amro – the deal that broke the bank:

              Swinney: the deal was “an enormous achievement for RBS” that helped make Scotland seem “an attractive place to do business”.

              Salmond: “would like to offer any assistance my office can provide”.

              These quotes by Swinney and Salmond refer to the deal, brokered by Goodwin and encouraged by these clowns which broke RBS and cost the UK taxpayer at least £60 billion.

            • Wessex Man

              Only because he never had the power to, as it was It was the Scots in charge of the UK government that did!

      • FF42

        Financial institutions tend to have subsidiaries in each territory they operate in. I assume most financial institutions currently based in Scotland will set up separate subsidiaries in rUK and an independent Scotland, with operations gradually drifting to England over time, as that is where the bigger market is.

        • Paul Bethune

          Natwest is already the largest retail bank in England and is a subsidiary of RBS.

        • Crying out loud

          Apart from operational costs are higher in most of England. You basically have to pay staff more in London and the SE etc as the cost of living there is higher than the rest of the UK. It would not make financial sense to build up staff in another country that costs more.

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