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The Scotsman: Shetland prepares for the lights to go out on the 30-year oil boom

MARTYN McLAUGHLIN

ONE of Scotland’s most oil-dependent communities has resigned itself to the “eventual conclusion of the islands’ oil era”.

Shetland Islands Council is about to embark on a 30-year plan for the Sullom Voe site, where oil operations could be replaced by a modern airport, or a plant making wind turbines.

At its peak, Sullom Voe handled 800 tankers a year, but now it deals with only around 200,or 400,000 barrels a day. About 6 per cent of the islands’ 22,000 population are involved directly or indirectly in the oil industry.

BP, which operates the terminal on behalf of companies participating in the Brent and Ninian pipelines, said Sullom Voe’s long-term future is “clearly dependent on the business being available to support the terminal.”

The strategic plan comes a day after fears were raised that Shell was preparing to scale down its extensive North Sea operations.

Sandy Cluness, convener of the council, said it was “vital that we start planning now for the downturn and eventual conclusion of the islands’ oil era.”

The report confirming the launch of the strategic plan, ratified last week by the local authority, states: “As the role of the oil industry continues to decline in Shetland, it is important that its value in economic terms is replaced.”

Much of the Sella Ness peninsula south of the terminal has been cleared for industrial development, though there has been only a limited take-up.

Tavish Scott, Lib Dem MSP for Shetland since 1999, has previously called on the new Scottish Executive to take heed of the impact on Shetland of its proposal to ban ship-to-ship oil transfers. He believes the council’s review is to be encouraged.

He said: “Shetland can’t be dependent on one economic stream. It’s good and right to go through a series of economic scenarios to see how the Shetland economy can be maintained.

“But I believe oil and gas will still be a strong part of the industry for the next 15 to 20 years. I’ve seen many reports suggesting the sector is nearing an end, and they’ve all turned out to be premature.”

When oil first arrived at the terminal in the autumn of 1978, it was expected Sullom Voe’s lifespan would be no longer than two decades, but analysts now predict the fields will still be producing beyond 2020, though at much reduced rates.

Lynne Staples-Scott, BP’s Scotland business advisor, said: “Our forecasts for the site certainly go well into the next decade and new technology and developments may well take us beyond that. Although the production peak is acknowledged to have passed, the remaining UK North Sea potential is still significant.

“The North Sea oil and gas industry has a good future ahead of it and Sullom Voe will continue to play its part for as long as possible.”

Published: Jun 16, 2007

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