North Sea Oil

HC Deb 13 November 1972 vol 846 cc14-8

9. Mr. Robert Hughes

asked the Secretary of State for Trade and Industry what his Department's policy is in relation to the building of oil rig supply vessels for use in North Sea oil fields.

Mr. Anthony Grant

There are no schemes of Government assistance specifically for oil rig supply vessels, but the builders of such vessels are eligible for construction grants and the ship owners to credit on the normal terms. The prospective market for supply vessels in the North Sea is among the subjects considered by consultants in a report recently submitted to the Government to which consideration is now being given.

Mr. Hughes

Is the hon. Gentleman aware that that answer is inadequate? What positive steps can he now take to assist British shipbuilders to build these vessels?

Mr. Grant

These vessels are in exactly the same position as other vessels in that they are entitled to the assistance available to the shipbuilding industry generally.

Mr. Wingfield Digby

Are not the number of orders placed in British yards for these vessels extremely disappointing? Will my hon. Friend give his attention to this matter because demand for these vessels must increase?

Mr. Grant

We are already giving consideration to this as a result to the report which has been submitted to the Government.

Mr. Douglas

Will the hon. Gentleman undertake to publish the IMEG report and will he discuss with his right hon. Friend the nature of subsidies given by other countries, particularly by the United States, for the construction of similar vessels?

Mr. Grant

We hope that a form of this report will be published, leaving out the confidential information, and that it will be available probably next month.

26. Mr. Douglas

asked the Secretary of State for Trade and Industry if he will make a statement on the devices which his Department proposes to use in order to evaluate the amount of expenditure in the United Kingdom by oil companies operating in the United Kingdom sector of the Continental Shelf.

Mr. Tom Boardman

My Department is in close touch with oil companies engaged in offshore development so as to assess the extent of British industry's participation and to decide what additional measures may be necessary to help such industry obtain an increased share of this market.

Mr. Douglas

Is the Minister aware that we are becoming increasingly dissillusioned by the nature of ministerial replies? How can the Minister of State, Scottish Office, say that our devices are all square with those of the Norwegian Government when the Minister refuses to disclose how he evaluates what the oil companies spend in this country? If it is not intended to put a clause of this nature into future contracts, will the Minister call in the companies' invoices every three or six months?

Mr. Boardman

The oil companies have agreed to provide detailed returns of their purchases and to give such information as is necessary and desirable to enable the Government to assess the contribution that the companies are making to the United Kingdom economy, in accordance with the terms of the licence.

Mr. Edward Taylor

As the Government have made it clear that they will be expecting and exhorting companies to give work to British firms which charge a fair price and can deliver on time, will the Government announce figures showing the improvement which it is hoped will take place in the next few years? Will my hon. Friend provide to the House information about the number of contracts placed with British firms and their value?

Mr. Boardman

I do not know whether it would be right to give that undertaking today; much of the information supplied is confidential. I will take account of what my hon. Friend says and see to what extent more information might properly be given within the confines of confidentiality.

Mr. Millan

When shall we have the White Paper about the general question of North Sea oil and its implications for the Scottish economy?

Mr. Boardman

As I have said on previous occasions, it is right that we should produce information about North Sea oil more attractively and, I hope, more fully than we have in the past. I cannot go further than that.

27. Dr. Dickson Mabon

asked the Secretary of State for Trade and Industry if he has yet calculated the percentage of the total expenditure in developing British Petroleum's Forties field which will be devoted to United Kingdom equipment, manpower and bases.

Mr. Tom Boardman

British Petroleum's assessment is that for the complete project about 60 per cent. of expenditure on equipment will be for British equipment and about 70 per cent. of expenditure on labour will be for British labour.

Dr. Mabon

I am much obliged to the Minister for that answer, which squares with his previous one. If that information can be given in respect of a company which has a large element of public ownership, cannot similar information be given in respect of other companies? Does not this make it all the more important to consider the White Paper which is being published, if not in relation to Scotland, at least in relation to the United Kingdom?

Mr. Boardman

I am sure the hon. Gentleman realises that we are breaking into a technology which is new to British industry. Countries which have long experience and skills in this technology will contribute a significant part of the plant and skills in the early stages. We should not read too much into the initial figures. I have under consideration what further information might be published, but I remind the hon. Gentleman of what I said in reply to an earlier Question about the need to preserve confidentiality.

Mr. Benn

Is not that the very point, that because this is a new technology substantial support will be needed from the British Government to enable British industry to compete? The publication of the figures would give the public an idea of how quickly we are able to meet this rapidly growing market.

Mr. Boardman

The right hon. Gentleman is right. Because it is a new technology the Government are doing exactly what he says they should be doing, under the Industry Act and by the employment of consultants to ensure that British industry is given every opportunity to compete and to maximise the contribution that North Sea oil will make to the economy of the United Kingdom.

29. Mr. William Hamilton

asked the Secretary of State for Trade and Industry what recent estimates he has made of United Kingdom companies' abilities to construct drilling rigs and production platforms for use in the North Sea.

Mr. Anthony Grant

Several British shipyards have the technical capability but the decision whether to build must be a commercial one. We are well placed for future orders.

Mr. William Hamilton

Does the Minister realise that his replies are so vague as to be completely unsatisfactory and that the only answer would be to publish a White Paper as suggested by my hon. Friend the Member for Glasgow, Craigton (Mr. Millan)? When the hon. Gentleman produces the expurgated version of the IMEG report, will he take the opportunity to include, as an addendum or otherwise, the number of people employed in Scotland on the pro- duction of oil rigs and their equipment and the proportion of Scottish steel going into their manufacture?

Mr. Grant

We will certainly consider that. The hon. Gentleman must remember that it is an IMEG report, and we are considering it carefully. I give the hon. Gentleman a positive assurance that several fixed production platforms are being fabricated in this country, one indeed in Fife, which will cheer him up.

Mr. James Hamilton

As the Minister is anxious for the maximum amount of work to be done by British firms, will he say what progress has been made by the British Steel Corporation in providing the underwater pipes which are imported from North America and other countries? What opportunities are being afforded to the BSC to keep open one of its obsolescent plants to produce these pipes which the BSC has stated categorically it is capable of doing?

Mr. Grant

With respect, that question does not arise directly out of the main Question but I will see what I can do to inform the hon. Gentleman in due course.

Mr. Wingfield Digby

Is my hon. Friend aware that the construction of rigs is well outside the normal work of an ordinary shipyard? Most firms feel themselves to be unsuited to cope with it, and special support is needed to encourage them to do so.

Mr. Grant

Yes, I accept that. With that in mind, the Government will study very carefully the report coming to them.