NORTH SEA OIL (Hansard, 14 March 1972)

§ Q3. Mr. Douglas
asked the Prime Minister if the public speech made by the Secretary of State for Scotland on Friday 25th February, 1972, at Aviemore, with respect to companies searching in the North Sea for oil, represents Government policy.

§ The Prime Minister
Yes, Sir. My right hon. Friend reaffirmed the Government's full support for oil exploration and development in the North Sea, and the need to take full advantage of Scottish skills and resources.

§ Mr. Douglas
Would the right hon. Gentleman accept that we must go a little further in attempting to get the maximum benefit from this natural resource of Scotland? Would he concede that we should exert pressure on the oil companies to ensure that not a pint of crude oil which can be refined in Scotland or in other parts of the United Kingdom finds itself exported without its being refined? Secondly, will he draw his right hon. Friend's attention to the proposals made by the Industrial Development Authority, based partly on the licence fees and royalties from the oil companies, and will he see what can be done by his right hon. Friend the Secretary of State for Scotland to facilitate that type of regional development?

§ The Prime Minister
Judging from the reports that I have read, the conference was valuable, and we will study the lessons to be drawn from it. The hon. Gentleman has raised the important question of exporting oil, and this will be a matter for discussion with the oil companies. As he knows, the B.P. project provides that a large amount of the oil should be refined at Grangemouth; and Shell proposes to land oil at Teesport in the North-East. It is thus already planned that much of the oil from the North Sea will be refined in the United Kingdom. A different problem arises over finance, and raises the question whether we should try to isolate finance for different parts of the United Kingdom. When in the past this issue has been examined, it has been thought that 293 to try to do this would not be of advantage to Scotland and areas like it.

§ Mr. Farr
Is my right hon. Friend aware that in some quarters it is felt that the disposal of some of our rights in respect of North Sea oil blocks could have been made on more beneficial terms? Will he look into this matter to see that the nation benefits fully from our wonderful potential.

§ The Prime Minister
The present Government changed the arrangements under which licences were granted. We were criticised for our action at the time, but it has proved to be more beneficial to the country as a whole. Later this week there will be an announcement about further awards of licences, and perhaps my hon. Friend will await that event.

§ Mr. Steel
Would the Prime Minister accept that there is a growing consensus in Scotland in favour of the idea of some form of Scottish development corporation, financed in part by revenues from oil finds, and does the right hon. Gentleman recall that at Aviemore the Secretary of State for Scotland seemed to give his blessing to this idea? Could we have a definite Government pronouncement on this matter?

§ The Prime Minister
I have already told the House, following my discussions with the Scottish Council, that we will examine this proposal. This is what my right hon. Friend the Secretary of State was indicating, and this is what is taking place.

§ Dr. Dickson Mabon
With regard to the oil that is alleged to be in other parts of the North Sea, particularly on the West Coast, is it not this matter all the more important when one considers the possibilities of refining at other sites, apart from use of the refinery at Grangemouth? Is he further aware that we are anxious about the fact that the Regional Development Corporation Bill was given a Second Reading but has not been further proceeded with? Does this mean that we shall soon have put before us radical regional policy proposals? If so, could it be connected with proposals relating to oil revenues?

§ The Prime Minister
The hon. Member is referring to a Private Member's Bill. I have already said that we have been undertaking a complete review of 294 regional development policy, and perhaps the hon. Gentleman will await the announcement to which I have referred. On the point about refinery capacity, I agree on the importance of the exploration around the North and West of Scotland, but it must be a matter for the commercial judgment of the companies as to where they consider oil should be refined, whether it be at Grangemouth or at refineries they wish to set up elsewhere.