§ 9. Mr. Skeetasked the Secretary of State for Energy if he will help to reduce the uncertainty felt by certain of the major oil companies by bringing forward the date set for the fifth round of North Sea licensing applications.
§ 10. Mr. Biffenasked the Secretary of State for Energy what proposals he has for a further round of licences to maintain oil and gas exploration activities in the Continental Shelf.
§ 11. Mr. Canavanasked the Secretary of State for Energy whether he will now make a statement about the consultations he has had about the next round of offshore oil drilling licences.
§ Mr. BennAs I announced in my reply on 27th May to a Question by my hon. Friend the Member for Dunbartonshire, West (Mr. Campbell), I have published a consultative document setting out my proposals for the fifth round. I am in touch with the industry and trade unions about their views on these proposals.
§ Mr. SkeetI am grateful to the Secretary of State for responding to my Question.
May I ask whether this will be an annual affair? Will the right hon. Gentleman say how much the Government are free to commit in annual exploration and development? Will there be a separate allocation to the BNOC and the British Gas Corporation?
§ Mr. BennI thought it right, and I thought the House agreed, that after the experience of the last round of licences we should consult about the terms and conditions which would get the best bargain for us without endangering the success of the round. As to the rôle of BNOC in exploration, it is of such critical importance that the British people should have some extra knowledge of this exploration. The cost of exploration is nothing like as high as the cost of development, and at a modest guess BNOC should normally be—
§ Mr. BennThe hon. Gentleman says that it is taxpayers' money, but the benefits accruing from exploration are formidable, and why we should seek to support foreign countries against our own investment I do not understand. How quickly we do this depends upon the pace at which we can settle the median lines with the French and Irish, but I think it better to do it in tranches rather than by means of the enormous round that was held in 1972 followed by a long gap, which tends to create problems with industrial development to meet the demands for equipment.
§ Mr. CanavanWill my right hon. Friend give an assurance that the participation agreements under the next round will make BNOC a full and active partner with at least a 51 per cent. stake in all oilfields with a majority say in decision-making, including the placing of orders to help employment prospects? Can we have real public ownership instead of the "phoney" negotiations carried out by my right hon. Friend the Chancellor of the Duchy of Lancaster?
§ Mr. BennIt is intended that BNOC, when negotiating for licences, should satisfy us that the national interest is safeguarded. Whereas before we have had 14 the problem of trying to change the thoroughly bad licensing arrangement reached by the previous Government, this time we are starting afresh. Therefore, our opportunities are greater and the BNOC rôle will be the development of the policy for which I have now assumed responsibility. We have in the case of Gulf/Conoco achieved a real participation through the NCB(Ex) investment. There is also the Gas Corporation involvement. In the case of Burmah, BNOC has taken over the major responsibility. Shell and Exxon are now ready to enter into talks with BNOC, and this makes meaningful the policy on which we are determined.
§ Mr. BiffenIs the House correct in assuming that both the number of blocks offered and the stricter time limit covering the relinquishment of blocks have been designed to facilitate a level of expansion and development which will bring orders and relief to the hard-pressed offshore industries? If that is so, will the Secretary of State indicate what he hopes will be the advantages in terms of additional orders for drilling rigs and production platforms that might be expected in this year and in 1977–78?
§ Mr. BennThe hon. Gentleman will recall that when I announced the fifth round last September I publicly said that we wanted to give a fillip to development in the North Sea, with the possible spin-off of more jobs in this country. We have published the consultative document, and the Minister of State, whom I welcome back, is involved with me in the consultations. We shall seek applications and we hope to award licences to get the 1977 drilling season under way. We hope to optimise and maximise the benefits to the United Kingdom industry deriving from the new round.
§ Mr. Ioan EvansWill my right hon. Friend ensure that the benefits from North Sea oil will go to the whole of the British people and that a minimal amount will go to foreign investors who wish to exploit it quickly?
§ Mr. BennIt is not for me to speak for the Almighty, but the Prime Minister allocated those responsibilties to the Minister of State. We are trying to get 15 the best possible bargain for the people of this country, compatible with the need to utilise the technology and massive investment required to develop the resources. We can achieve a better deal than the previous Government. We think that oil companies are coming to realise that we are determined that our 51 per cent. policy will be carried through. In the new round of licensing we have the chance to maximise the benefit for the people.
§ Mr. Alexander FletcherDoes the Secretary of State agree that the way to get the best possible bargain is to make sure that the criteria for the granting of new licences is the performance and resources of the oil companies rather than meekness in the face of the Government's participation proposals?
§ Mr. BennI do not wish to be sharp with the hon. Gentleman, but if I had taken the Opposition's advice during the passage of the Bill the country would be no better off in any respect, and a great deal weaker in its capacity to defend its national interest all over the world. The nation States and Governments are seeking to achieve a commanding position for their own people in the benefits deriving from oil, but we must also proceed to participation by way of understanding with the oil companies, and by legislation. The legislation that we have adopted has been absolutely right. If the hon. Gentleman thinks that Shell and Exxon are meek in their approach to the Government—and I see that he hopes that they are not—I will leave on the record that in the event of conceivable difference of opinion the hon. Gentleman hopes that Shell and Exxon will maintain their position.
§ Mr. SkinnerWill my right hon. Friend tell some hon. Members on the Government side of the House, without equivocation or qualification, that what he is about in the future licensing deals is not something that is a bit better, is not to increase Britain's rôle, but is to take over the majority ownership of those licences with which he will be concerned? Is he aware that we are not terribly interested in what will happen in the long or medium term, but we are interested in what he will do in the short term, with the licences that are coming on to his table?
§ Mr. BennMy hon. Friend knows the answer. Not only has our policy been made clear; the consultative document is out, to give the trade union movement, the oil companies and industries concerned an opportunity to comment. My hon. Friend knows that in order to develop the North Sea substantial investment and technology are required, and that we intend that the British interest in that is represented by 51 per cent. participation. It is no good my hon. Friend dismissing that, because it was the policy on which he and I were returned to the House, and we are seeking to apply that policy in the next round of licences.
§ Mr. Donald StewartI approve the Secretary of State's laudable intention to give us as much local employment as possible, but will he consider definitely moving the headquarters of the BNOC to Glasgow, where it is alleged to be, instead of the decision-making and work being done at the branch office in London?
§ Mr. BennThe hon. Gentleman knows about the arrangements for the headquarters. He also knows that BNOC works from Scotland but that there is some work that requires to be done in England and some in Aberdeen. He would be making a great mistake if he supposed that the work of BNOC is not of itself helpful to the development of resources which are for the benefit of the whole of the United Kingdom.