UK: How Shetland's Gaddafi took on oil giants to win bountiful deal
03 Jan 2005
Confidential documents released today reveal how Shetland’s own "Colonel Gaddafi" skilfully manipulated international oil companies and the government at the start of the North Sea boom to win millions of pounds for the islands.
Scottish Office records detail how petrochemical giants Shell and Total, two Scottish Secretaries and a host of civil servants, became increasingly concerned that Shetland was standing in the way of the development of the Sullom Voe terminal as it held out for the best deal. Shell even regarded the council’s chief executive, Ian Clark, as more difficult to deal with than the Libyan leader, Colonel Muammar Gaddafi.
During tense negotiations over 1973 and 1974, the council threatened to decide that oil developments were unacceptable.
The Conservative Scottish secretary Gordon Campbell wrote to the then prime minister, Edward Heath, saying that exceptional measures might have to be taken to force the island to accept the terminal.
In 1973 the price of oil rocketed from $3 to $12 a barrel after the Middle East OPEC cartel decided to increase prices. The ensuing fuel crisis tipped the world’s economy into recession.
It was in this atmosphere that Mr Clark threw out an early offer from Shell and complained the oil companies appeared to think the council was completely bereft of all business-sense. In the end, Shell made an offer that Shetland’s council convener, George Blance, feared was so generous as to prompt central government to interfere.
Today the islands are marked by a lack of potholes, a fondness for luxury cars, an extensive network of recreation centres, well-appointed residential homes for the elderly and a £286 pay-out to every pensioner at Christmas, thanks to the astonishing deal secured by Mr Clark and the council, which is still worth about £11 million a year.