HC Deb 08 November 1954 vol 532 cc850-2
34. Mr. Nabarro

asked the Minister of Fuel and Power what estimate he has made of the additional oil supplies that may be made available for the United Kingdom market in the next three years as a result of Shell, Royal Dutch and B.P. participation in the Iranian Oil Consortium, following resumption of the working of the Abadan refinery; whether such supplies for the United Kingdom will be available for purchase entirely in sterling and free from dollar elements; whether such purchases will be at British coal-parity prices; and whether he will make a statement.

Mr. Geoffrey Lloyd

Some 35 million tons of Persian oil are likely to become available to these companies in the course of the next three years, but, since their operations are on a world-wide scale, no specific proportion of that total quantity can be properly described as being available either to the United Kingdom or to any other particular market. The companies will purchase this oil for sterling, but operations in Persia will, of course, involve the United Kingdom in some dollar expenditure. No question arises of parity with British coal prices until a sale is being negotiated by the oil companies with a consumer.

Mr. Nabarro

While congratulating my right hon. Friend and my other right hon. Friends upon the success that has attended the negotiations for the re-opening of this refinery, may I ask him whether there is any relationship between this substantial additional volume of oil that will eventually accrue to the United Kingdom market and the policy he has recently announced for continuing with dual firing in so many of our major electric power generating stations?

Mr. Lloyd

Yes, certainly, because this increased quantity of oil coming from Persia will greatly assist the general supply situation and, therefore, will make a direct contribution to the solution of the fuel problems of the United Kingdom.

Mr. Gaitskell

Will the right hon. Gentleman explain what he means by the phrase about some dollar expenditure being involved in Persia? Is this the result of the financial agreement with Persia? Will he please explain?

Mr. Lloyd

What I had principally in mind was that in all oil production there is an amount of specialised machinery which comes from the United States, because of their experience of it. There has been also in all the negotiations with Persia a provision for a certain amount of convertibility to dollars.

Miss Ward

On fuel policy generally, may I ask my right hon. Friend whether all these operations involve carrying coals to Newcastle or not? May I have an answer?

Hon. Members

The Minister does not know.

Mr. Gaitskell

Will the Minister explain whether he anticipates that, as a result of the reopening of the Abadan oil refinery, it will now be necessary to pay Persia additional dollars?

Mr. Lloyd

No. As I understand the position, the oil companies will require to buy from time to time a certain amount of special plant from the United States. That is one side of the problem. On the other side is the provision, as in past arrangements with Persia, that some of the sterling that Persia receives can be converted in certain circumstances into dollars.