As Scotland decides on independence today UK-based research and consulting firm Wood Mackenzie released a report that concludes future oil and gas production in Scotland is “under pressure” from dwindling reserves and increased operational costs.
The report, released Thursday, said while long term production decline will be temporarily alleviated with a 30,000 barrels of oil equivalent per day hike in 2018 production will dip below 1 million boepd by 2023.
According to Wood Mackenzie, that dip will place production at less than a quarter of 1999 levels.
Wood Mackenzie also said production decline rates in 2013 were higher than expected as unscheduled maintenance, project delays, smaller than expected discoveries and the sluggish economic recovery weighed production down.
Wood Mackenzie said if Scotland becomes independent a border dispute could cause uncertainty and hurt investment plans in those areas.
The majority of Scotland’s oil and gas assets are in the UK North Sea.
The bulk of UK oil and gas reserves are in Scotland’s waters and, if the country votes for independence, Wood Mackenzie said Scotland would control the “vast majority” of production and “most prospective acreage.”
The creation of new regulatory offices and frameworks could also cause production and exploration delays, the report said.
The production decline is expected to also strain Scotland’s coffers.
Wood Mackenzie estimates that by 2030 nearly $9 billion in tax relief will be claimed for decommissioning costs in Scottish fields.
The relief is currently set to be covered provided by decommissioning relief deeds between license holders and the UK government.
Scotland’s government said it will provide a similar deal if the country goes independent.
The results of the independence vote are expected on Friday.