HC Deb 15 November 1966 vol 736 cc198-200
3. Mr. Dalyell

asked the Minister of Power what percentage of licences for North Sea gas exploration has been granted to foreign and foreign-owned subsidiary companies.

Mr. Marsh

Of the 90 production licences granted, 46 are held by foreign-owned, U.K.-registered companies; 36 jointly by foreign-owned U.K.-registered companies and U.K.-owned companies; and 8 by U.K.-owned companies. Foreign-owned interest in the 53 licences granted in 1964 amounts to about 70 per cent., and in the 37 licences granted in 1965 will amount to about 63 per cent. if the options open to the National Coal Board are fully taken up.

Mr. Dalyell

Taking a long-term view, is this in the Government's opinion a satisfactory ratio?

Mr. Marsh

This is the way it works out. The intention of all people involved in this was to get the natural gas exploited as rapidly as possible. Most of the oil companies are foreign-owned, and if we were to keep purely to British companies there would be great delay in exploiting it.

Mr. J. H. Osborn

Is it not fortunate that a capital-hungry country is able to obtain capital for this purpose from abroad? What will the Minister do to encourage this trend to help him in this and in other fields?

Mr. Marsh

The main purpose of the exercise is to be sure that we exploit all the North Sea gas reserves as rapidly, as completely and as quickly as possible. Certainly foreign companies provide investment, but that is not the purpose of awarding the contracts. The purpose is to get as many people drilling as many holes as rapidly as possible.

22. Mr. Hector Hughes

asked the Minister of Power what provision is contained in the licences to exploit the oil and gas resources of the North Sea to enable the British Government and the licensees to end or determine the duration of the licence.

Dr. Bray

The Government may revoke any existing licence if the holder fails to comply with its terms and conditions. After an initial period of six years at least half of each of the areas licensed reverts to the Crown. A licensee may determine the licence during his six-year initial term by giving at least one year's notice, and during the subsequent term of forty years by giving at least two years' notice.

Mr. Hughes

Does the Minister agree that it is of the utmost importance that he, as licensing authority, should retain powers to end these licences if the products are used to assist our Continental competitors instead of Britain's trade and industry?

Dr. Bray

My right hon. Friend has complete control of the uses to which North Sea gas is put through the Continental Shelf Act.

Mr. Ogden

Does not my hon. Friend agree that the terms of licences at present encourage companies to exhaust their funds within the terms of the licences they hold and that this might not be in the national interest?

Dr. Bray

Forty years is a very long time, and we have had no proposals that the depletion period should be anything like as long as that.

Mr. Corfield

Is it not true that the Continental Shelf Act does not give the Minister power to intervene where a developer wishes to use the gas in his own works for non-fuel purposes?

Dr. Bray

Yes, but the fuel has to be landed in the United Kingdom, which is the point that my right hon. Friend is concerned with.

23. Mr. Hector Hughes

asked the Minister of Power how many licences to drill for oil and gas in the. North Sea he has issued during the last 12 months and to whom; and what conditions he includes in those licences requiring the licensees to get supplies from and repairs to their rigs done in Great Britain rather than in foreign countries.

Dr. Bray

37 production licences have been granted during the last 12 months and details were, as announced on 24th November, 1965, placed in the Library. Licences do not include any condition requiring the licensees to go to any particular place for supplies or repairs. My right hon. Friend, however, has made it clear to operators that wherever possible orders should be placed in Great Britain and is satisfied that this request is being honoured.

Mr. Hughes

Is not my hon. Friend aware that when one of these rigs was recently damaged repairs were effected on the Continent instead of being done by British industry? Will he see that that does not occur again?

Dr. Bray

Yes. In this case the owners of Ocean Prince—the rig in question—made extensive but unsuccessful inquiries in the United Kingdom before going to Europe.