North Sea Oil

HC Deb 26 March 1973 vol 853 cc891-3

2. Mr. William Hamilton

asked the Secretary of State for Trade and Industry whether, in the light of recent developments, he will make a statement on the future handling of North Sea oil licensing policy.

The Minister for Industry (Mr. Tom Boardman)

A statement will be made when the current policy review is completed.

Mr. Hamilton

How long will that be?

Mr. Boardman

I cannot say precisely, but it is well advanced.

Mr. Sydney Chapman

Can my hon. Friend say when the oil companies hope to start making profits from North Sea oil?

Mr. Boardman

It is not expected that any oil will come ashore until the end of 1974, and no profits will start to be generated until oil comes ashore for sale.

Mr. Eadie

It is pertinent here to remind the Government that they did not implement all the IMEG proposals. Does not the hon. Gentleman think it appropriate that they should list the proposals which they have implemented, that they should let us know those which they are considering and tell us of those which they have rejected? The House is entitled to that information.

Mr. Boardman

The particulars have been given. A statement was made on the IMEG Report giving the proposals which were accepted, those which were subject to further consideration and those which had not been accepted and on which the Government had taken a different line which they considered better in the circumstances.

29. Mr. Skeet

asked the Secretary of State for Trade and Industry whether he is now in a position to make a revision in his Department's assessment of crude oil reserves in the North Sea.

Mr. Tom Boardman

The Department is now reviewing its North Sea estimates in the light of drilling results to date.

Mr. Skeet

My hon. Friend has not given any information and it is high time that he did in view of the new discoveries that are being made. Will he identify the fields upon which he assesses current reserves in the North Sea, and is he prepared to indicate the eventual potential of the North Sea as being something like 30 billion barrels?

Mr. Boardman

My hon. Friend will know that the figures quoted last spring were the result of the previous year's drilling programmes. The present review is taking place in the light of the drilling programme to date. It is very difficult to assess the production or flow rate of a field or the percentage of recoverable oil until production has commenced, and even then there remains uncertainties.

The Forties, Auk, Brent, Argyll and, more recently, the Piper fields axe expected to be commercial, and there are three other promising finds—Beryl, Montrose and Cormorant.

Mr. Douglas

Can we have some information not only about the reserves but about the negotiations taking place with British Petroleum on the price of the oil from the Forties field? This is of the utmost importance in assessing profitability and how the Government intend to tackle the corporation tax which should be coming to the United Kingdom from this field and others.

Mr. Boardman

No negotiations are taking place at present, but all matters relating to the North Sea are currently under review.

31. Mr. David Steel

asked the Secretary of State for Trade and Industry if he will consider extending the British sector for exploration of North Sea oil north of the 62nd parallel.

Mr. Tom Boardman

The matter is at present under consideration.

Mr. Steel

While it is under consideration, who has authority to issue exploration licences north of the 62nd parallel?

Mr. Boardman

No authority yet exists. But this is a matter being considered as part of the proposals covering other areas of the Shelf.

Mr. Dalyell

When will negotiations be completed? This is very important to the oil companies.

Mr. Boardman

I cannot give any date. It has not yet become a matter of urgency. But I recognise the need to press ahead with it, and work is going on towards that end.

Mr. Molloy

Does the Minister realise that the ramifications of this matter will have serious effects on industries in practically every constituency in this country? Is he aware that from the behaviour of Ministers at the Dispatch Box today, many of us would have been better off going to a clairvoyant rather than listening to the ridiculous excuses that we have heard.

Mr. Boardman

I do not think that the hon. Gentleman will expect me to reply to the last part of his supplementary question, except to disagree most fundamentally. A large part of the North Sea Shelf has been licensed. Indeed, one criticism made by the Public Accounts Committee is that perhaps too much has been licensed. There is no question of there not being sufficient work to keep everyone fully occupied for some time. The need for defining areas north of the 62nd parallel is not yet a matter of urgency.