HC Deb 16 February 1976 vol 905 cc927-9
13. Mr. Ioan Evans

asked the Secretary of State for Energy whether he will make an up to date statement on mea- sures to be taken to ensure that offshore oil activities are developed for the full benefit of the British people.

Mr. John Smith

The Government are implementing the policies set out in the July 1974 White Paper "United Kingdom Offshore Oil and Gas Policy" (Cmnd. 5696) through the powers they have taken in the Oil Taxation Act and the Petroleum and Submarine Pipe-lines Act, through the establishment of BNOC, and through the current negotiations to secure majority State participation in existing commercial oilfields. In future licences the State will have the right to a majority share.

Mr. Evans

I welcome the steps taken by the Government to ensure a majority State holding. Will the Government keep their options open in the years ahead in respect of further reserves which may be found in the North Sea and in the Celtic Sea so that there can be complete State participation in ownership and so that the full benefits of development can come back to the people of Britain as a whole?

Mr. Smith

Like my hon. Friend, I look forward to the development of our Continental Shelf in areas which have not so far been developed, such as the Celtic Sea and other parts of our offshore areas. It will be possible for the BNOC to apply for an exclusive licence in any rounds of licensing, in which case the ownership by the State will be 100 per cent. and the return on profit will be 100 per cent. as well.

Mr. Cormack

Is the hon. Gentleman happy that these offshore installations are safeguarded? Is he in constant touch, for instance, with the Ministry of Defence?

Mr. Smith

Yes, we are in touch with the Ministry of Defence. The last announcement to the House, I think made by the Minister of State for Defence, outlined the provisions which the Government are taking through the deployment of ships and aircraft to safeguard our North Sea oil resources.

Mr. John Garrett

Can my hon. Friend confirm that the manager of one company has refused to enter into negotiations with the British Government for a participation agreement?

Mr. Smith

We have had communications from some companies stating that they are not yet prepared to enter into discussions in detail with the Government, but these difficulties will be overcome and I am confident that we shall reach satisfactory agreements with the companies concerned.

Mr. Tim Renton

Do the Secretary of State's comments earlier this afternoon mean that he is reneging on the commitment of the Chancellor of the Duchy of Lancaster that participation will be voluntary and that he is now stating that it will be compulsory?

Mr. Smith

Nothing that my right hon. Friend said could possibly bear that interpretation. The hon. Gentleman should give up that sort of mischief-making.

Mr. Leadbitter

My hon. Friend will know that a special element in offshore activities is the oil rig construction industry. Is he not aware that in my constituency a few days ago 2,000 people were notified that about 1,300 of them would lose their jobs in July because of the lack of orders? Is he further aware that the men appreciate the work of himself and the Secretary of State in attempting to get some sort of rationale working here in order that the future of the yard can be determined? Nevertheless——

Mr. Speaker

Order. The hon. Gentleman has already asked two supplementaries. Perhaps he will wait for the answers to them.

Mr. Leadbitter


Mr. Speaker

I am asking the hon. Gentleman to appreciate that he has had his rations.

Mr. Smith

I am aware of the serious nature of the problem to which my hon. Friend has referred. I think his constituents must be aware of the very diligent way in which he has pursued their interests with the Department.

We expect that there will be a number of further platform orders this year. Certainly the yard in my hon. Friend's constituency is well placed, on the basis of past productivity and excellent labour relations, to put in a bid for such orders as are available.