HC Deb 04 February 1974 vol 868 cc871-4
18. Mr. Douglas

asked the Minister for Energy if he has completed his review of licensing policy for the United Kingdom sector of the Continental Shelf.

23. Mr. Millan

asked the Minister for Energy if he will make a statement on Government policy on participation by foreign countries in the exploitation of North Sea oil.

Mr. Patrick Jenkin

We are reviewing all aspects of licensing policy. A report will be made to Parliament when the review is complete.

Mr. Douglas

Does the right hon. Gentleman accept that, in view of the autocratic promotion of his right hon. Friend in another place, this House needs a White Paper dealing with all aspects of licensing policy, and in particular the relationship which the Department has with the oil companies and the contractors with a view to producing designs for equipment which are United-Kingdom based, avoiding the fiasco of the Drumbuie inquiry?

Mr. Jenkin

I said in my original answer that when a decision has been reached it will be reported to Parliament. We shall naturally consider whether a White Paper will be the most helpful way.

On the question of relations with the oil companies and the designers of equipment, the offshore supplies organisation is now part of the Department of Energy, and this is a matter which we have under consideration with the designers and the oil companies.

Mr. Wilkinson

Can my right hon. Friend say anything about discussions with the Japanese concerning the exploitation of North Sea resources? Many people, whilst understanding the need for the most rapid exploitation of those resources in the interests of the consumer in this country, are none the less a little concerned that the Japanese may get their foot in the door and take what should rightly be ours.

Mr. Jenkin

When I met Mr. Nakasoni when he was in this country, he expressed to me the desire of the Japanese to play their part in the exploitation of the North Sea. I asked him what advantages he felt there might be for this country in their so doing—whether they could bring in additional technology or speed up supplies in any way. Those are matters which, no doubt, the Japanese Government will be considering. However, I made it abundantly clear—and Mr. Nakasoni accepted this—that there was no question but that the oil here is British and that we would require it to come to this country.

Mr. Millan

Is it not absolutely ludicrous that the Minister for Industrial Development should go to Japan and invite the Japanese to get involved on the supply and equipment side, specifically inviting them to get involved with the construction of oil rigs, when the one oil rig company in this country—Marathon, at Clydebank—is not even able to get exemption from the three-day working week?

Mr. Jenkin

I have seen reports of what my right hon. Friend has said in Tokyo and I have reported to the House on the discussions I had with Mr. Nakasoni, the Minister for Industry and Trade, when he was here.

Mr. Grimond

Will the Minister consider one aspect of the foreign participation in oil exploration? Why should British vessels not be allowed to serve British rigs off the coast of America when American vessels are allowed to serve all rigs off the coast of Britain?

Mr. Jenkin

That is a matter which we have under discussion with the American Government.

Mr. Skeet

Does my right hon. Friend agree that a lot of North Sea oil will have to be exported, and that those who buy it will have to pay the world prices? It might be a good idea if he considered the possibility of a posted price for North Sea oil.

Mr. Jenkin

The question of pricing North Sea oil is one of the major matters which my Department has to consider, but, of course, it will be some time before the oil is flowing ashore in substantial quantities. I confirm what my hon. Friend says. North Sea oil is by quality a premium oil, and it is likely that the return to this country will be higher if it is exchanged for oil of a lower quality which we can use and the North Sea oil is sold at the highest possible price overseas.

Mr. Dell

Will the right hon. Gentleman say whether it is the Government's view that the rise in oil prices has so completely outdated the basis upon which the licences have been issued that the whole position—concerning not just the future but the four rounds of licensing in the past—must be reconsidered? Will he also say when the Government, at long last, will make the statement that he promised?

Mr. Jenkin

On the latter part of the right hon. Gentleman's question, I am sure that he would wish the new Ministers to give proper consideration to what is perhaps one of the most important single aspects of the North Sea before making a statement.

On the first part of the question, it is not the least of the advantages that this review has taken as long as it has, because we are now able to reach conclusions in the light of the up-to-date energy situation, with all the changed conditions to which the right hon. Gentleman has drawn the attention of the House.