HC Deb 05 June 1972 vol 838 cc31-2
Mr. Benn

(by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the nationalisation of the Iraq Petroleum Company.

The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home)

On 1st June the Iraq Government announced the nationalisation of the Iraq Petroleum Company in Iraq. Shortly thereafter the Syrian Government announced similar action against the IPC pipeline and installations in Syria in sympathy with the action of the Iraq Government.

On 17th May the Iraq Government put forward to the Iraq Petroleum Company a demand that it should increase production rates in North Iraq and settle the long-outstanding issues between the two sides, and requested compliance within two weeks. On 31st May the company put forward counter-proposals, which were rejected. The Iraq Government proceeded to nationalisation the following day without further negotiation.

The Government regret the lack of prior notification by the Iraq and Syrian Governments. The Government also hope that the Iraq and Syrian Governments will make provision for prompt, adequate and effective compensation to the Iraq Petroleum Company and that a solution to the dispute between the Iraq Government and the Iraq Petroleum Company can still be found which will prove acceptable to all parties. The Government naturally look to the Iraq and Syrian Governments to ensure the safety of the British employees of the IPC in Iraq and Syria.

Mr. Benn

I am grateful for the right hon. Gentleman's statement. Can he confirm that the Government have no objection in principle to nationalisation and that their concern is about compensation for the assets owned? Can the right hon. Gentleman say to what extent we are dependent on oil from these sources and what effect on oil supplies and prices is now expected? What talks has the right hon. Gentleman had with the American, French and Netherlands Governments? What is the legal position of oil which might be being exported pending settlement of the compensation claim? Will the right hon. Gentleman keep the House informed?

Sir Alec Douglas-Home

On the question of nationalisation, it is better that I should not say anything until the industry has had a further chance to consider the legal position, about which I gather there are some doubts, concerning the nationalisation action. The United Kingdom takes 3½ per cent. of its supplies from Iraq. The European figure is 9 per cent. I had some preliminary talks with the French and the Americans in Berlin two days ago. We hope to have a further meeting on Thursday. As for the export of oil from Iraq, I gather that none at present is being exported through the pipeline.

Mr. Skeet

Is my right hon. Friend aware that compensation for the former sequestration of a large part of the concessions has not been paid? Does my right hon. Friend expect that in the next two years compensation will be paid for the nationalisation of the Kirkuk oilfield?

Sir Alec Douglas-Home

I await the outcome of the meeting that the industry is having in the next day or two and the meeting of the four Governments mainly concerned.

Mr. Kaufman

In view of this latest example of the utter unreliability of these countries, will the Government now abandon their policy of appeasing these countries, which the Foreign Office has been so abjectly pursuing for so many years?

Sir Alec Douglas-Home

Yes, Sir, if the hon. Gentleman's party will abandon nationalisation.

Mr. Tugendhat

Will my right hon. Friend, in his consideration of these matters, maintain close contact with the French Government especially? This is an industry in which we are in partnership with the French, and we hope that our new-found friendship with the French will extend to oil matters, which it has not done in the past?

Sir Alec Douglas-Home

I had a preliminary talk with M. Schumann in Berlin, and we shall follow this up on Thursday.