§ 3.25 p.m.
Lord CAMPBELL of CROYMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether the Secretary of State for Energy received several weeks ago the estimate made by the United Kingdom Offshore Operators' Association that the average number of exploration drilling rigs operating in the North Sea in 1976 would be reduced to 20.
§ Lord LOVELL-DAVISMy Lords, the Secretary of State for Energy has received no communication from the United Kingdom Offshore Operators' Association on this subject recently. In the course of our discussions over the past year, the UKOOA have told us that it is their view that the level of explora- 1380 tion activity will reduce next year. As I said in my letter to the noble Lord on 8th September, however, I understand that no estimates have been published by the Association.
Lord CAMPBELL of CROYMy Lords, I am grateful for that reply. But is the noble Lord aware that the Association say that they gave this estimate to the Department as long ago as March 24th? Is he further aware that I drew attention to the estimate in our debates on July 23rd and August 7th, attributing it to the Association? Can he explain why the noble Lord, Lord Balogh, denied this in the debate last Friday? Was it a Freudian revelation of the Government's fixed conviction that the banks and industry are engaged in a game of bluff?
§ Lord LOVELL-DAVISMy Lords, it is a fact that the UKOOA have told us that they expect the numbers to reduce. I understand that informal suggestions of figures were made by individuals. In that case, it is a pity that none of those concerned thought it worth while to publish or to try to explain or justify their figures. On the other hand, my noble friend Lord Balogh during the debate the other day remembered the text of a speech by Mr. Monty Pennell of BP which had been published; and that specifically mentioned the figure of 20.
Lord CAMPBELL of CROYMy Lords, was the BP spokesman not simply repeating the estimate made public in this House? Is the noble Lord aware that oil has to be found and won, and that in Britain's case this is needed soon and is won in only the most difficult conditions? Is the noble Lord aware that, in his endearing manner the noble Lord, Lord Balogh, seems to give the impression that he himself could win the oil single-handed, equipped only with a hand drill and a snorkel?
§ Lord LOVELL-DAVISYes, my Lords—and he might.
§ Lord CARRINGTONMy Lords, supposing the number of 20 proves to be right, are the Government satisfied or worried?
§ Lord LOVELL-DAVISMy Lords, we shall be publishing our estimates of 1976 rig activities in the next Brown 1381 Book. There will be a falling off. It will be remarkable if the 1975 record of rigs in operation and discoveries made could be sustained indefinitely. This year is likely to represent a peak in exploration and drilling, falling, as it does, in the middle of the six-year licence period. The Government recognise the importance of maintaining exploration. That is one reason for conducting a new licensing round in 1976.
§ Lord CARRINGTONMy Lords, would I be right in saying that the answer to my question is, No, the Government are not satisfied? If so, what will they do about it?
§ Lord LOVELL-DAVISNo, my Lords, that would not be true.
§ Lord CARRINGTONThen, my Lords, what did the noble Lord mean?
§ Lord LOVELL-DAV1SMy Lords, this is variable, as I explained at some length to the noble Lord, Lord Campbell of Croy. This matter has arisen before several times. Exploration drilling, which is the subject of this whole matter, represents about 1 per cent. in value of all offshore activity, and it is an index of activity only to that extent. Even within these narrow limits it is a very uncertain indicator.
§ Lord GISBOROUGHMy Lords, can the noble Lord indicate how many exploration rigs are at the moment laid up?
§ Lord LOVELL-DAVISYes, my Lords; there are currently 26 and an average of almost 28 for the whole year. We predicted 30. In 1974 there was an average of 24½—one works them out on the basis of rig years—and in 1973 there were 13.3. There has been a considerable increase during this year. As I said, it is unlikely that that will be sustained. I do not think there is any cause for dismay.
Lord CAMPBELL of CROYMy Lords, while the present programmes are being carried out where massive investment has already been committed, may I ask whether this sharp reduction in drilling is another signal that the further plans are being shelved?
§ Lord LOVELL-DAVISNo, my Lords; it does not. As I said, this is 1382 variable. What is important at the moment is the development of production. I find it distressing that we constantly hear this gloomy story from noble Lords opposite. I should think that this is a time when we could have expected more optimism from them. After all, North Sea oil has come on flow this week.
§ Lord HAILSHAM of SAINT MARYLEBONEMy Lords, why should we express optimism that we do not feel?
§ Lord SLATERMy Lords, would my noble friend agree that, in view of these questions from the other side of the House, it is the policy of Her Majesty's Government that until now they have not closed the door on increased exploration on this great venture so far as the oil rigs et cetera are concerned?
§ Lord LOVELL-DAVISMy Lords, there is no question of closing the door on exploration. As I have already said, we take this to be extremely important. That is why we are promoting the next licensing round next year.
§ Lord GISBOROUGHMy Lords, is the noble Lord aware that my question was: how many rigs are laid up at the moment, including those in Norway? Was his answer that there were 26 rigs laid up at the moment?
§ Lord LOVELL-DAVISMy Lords, that is altogether a different question. Rigs move about all the time. I am sorry if I misunderstood the noble Lord. I have no idea how many rigs are laid up. This is a variable activity; rigs, which are independently owned, move around a great deal.
§ Lord CARRINGTONMy Lords, would the noble Lord, Lord Balogh, whose Department this is, know the answer?
§ Lord SHEPHERDMy Lords, if I may say so, I rather resent that remark—and so would the noble Lord if he had been sitting on this side of the House—as a reference made to a Minister who has answered all the questions put to him, and answered them adequately.
§ Lord MACKIE of BENSHIEIs the noble Lord aware that in other quarters, apart from those where the Government 1383 may expect automatic hostility, there is a little unease about the attitude of the noble Lord, Lord Balogh, who in his broadcast seemed to regard the matter as a game? The Government should be working with the oil companies towards the result we all desire to achieve. If the production is important, would the noble Lord agree that exploration must take place along with it, otherwise you do not know how much oil you can use?
§ Lord SHEPHERDI agree with the noble Lord, and I also agree with him that this is not a game. It is something which is serious and we will in due course have yet another stage of the Petroleum and Submarine Pipe-line Bill which may be an opportunity for the noble Lord, Lord Campbell of Croy, to pursue the matter in a debating form and not at Question Time.