North Sea Oil (Hansard, 22 March 1976)

§ 1. Mr. Marten
asked the Secretary of State for Energy when last he had discussions with the Norwegian authorities concerning North Sea oil and related matters.

§ The Minister of State, Department of Energy (Mr. John Smith)
My right hon. Friend has not had an opportunity to do so yet, but he hopes it will be possible to meet Mr. Gjerde, the Norwegian Minister of Industry, before long. There have been frequent exchanges between officials, however, the most recent being a meeting between the Permanent Under-Secretary of my Department and Norwegian officials on 16th March.

§ Mr. Marten
In view of the disquiet, certainly in some Norwegian circles, that 2 there was an element of unfair competition in tendering for the supply of materials for British operations in the North Sea, may I assume that as a result of those talks at official level the "Buy British" policy will apply on these occasions on the basis of "all other things being equal", as it were, and that harmonious co-operation will continue between our two countries?

§ Mr. Smith
At the meeting to which I referred, full and fair opportunities for the industries of both countries on both sides of the line were discussed. The policy of the British Government is that our industries must receive a full and fair opportunity in the United Kingdom sector. We also hope that many of our companies will be able to obtain orders on the Norwegian side of the line, on the basis of their competence and proven reliability.

§ Mr. Gordon Wilson
The trade unions in Norway seem to have better access to offshore rigs and platforms than is the case in the United Kingdom. When is it likely that facilities similar to those that exist in Norway will be offered to trade unions in the United Kingdom?

§ Mr. Smith
The Government are certainly aware of the difficulty that faces some trade unions relating to access to offshore establishments for recruitment purposes. We are actively discussing this matter. I think that the hon. Gentleman is correct; there is a condition—how effective it is, I am not sure—in the Norwegian licensing.

§ 5. Mr. Canavan
asked the Secretary of State for Energy what is the latest available figure for the total amount of oil extracted from United Kingdom oilfields in the North Sea.

§ Mr. John Smith
1.81 million tonnes as at the end of February. Figures are published monthly in the Department of Energy's publication Energy Trends.

§ Mr. Canavan
Would the rate of extraction be substantially altered if the Government took firmer steps to favour British employment interests in North Sea oil contracts? In particular, as in the past we have managed to get only about one-quarter of the contracts for rigs, will my hon. Friend consider putting a ban on foreign rigs which do not measure up to our standards of safety and structural regulations?

§ Mr. Smith
When my hon. Friend talks about rigs, I think he is referring to mobile exploration drilling rigs. In case there is confusion, I ask the House to bear in mind the large number of contracts we have got for fixed production platforms. Of the 20 either installed or ordered in the United Kingdom, 14 have been built here and six abroad. Of the six which went abroad, four were for concrete platforms—the orders for which went abroad at a time when we did not have the capacity—and two were for steel platforms, made at a time when our steelyards were very severely stretched.
We did not do so well on our exploration rigs. The voluntary agreement with United Kingdom offshore operators which we negotiated is an important step forward, because it is now accepted that British goods will be ordered when they are competitive in price, quality and specification.
On the question of the safety of rigs, the Government have the power to ban any rig or platform which has not received a certificate of fitness——

§ Mr. Speaker
Order. Answers should be reasonably brief, just as the questions should be, as long as the question is answered.

§ Mr. Gordon Wilson
As the real benefit will come from the flow of oil rather than from the offshore jobs, what negotiations has the Minister of State had with the Scottish Development Agency and the 4 Scottish Trades Union Congress with a view to steering towards Scotland those Scottish resources which have been liberated by the oil flow?

§ Mr. Smith
Our concern is with the oil prospects in all parts of the United Kingdom. Scotland has a large share. Very lengthy discussions take place with the Agency through the means of the Offshore Supplies Office.

§ Mr. James Lamond
By how much money have the British people benefited by the extraction of this 1.81 million tonnes of oil?

§ Mr. Smith
Because of the taxation aspect, it is early days yet to assess the value. The costs of the installation have to be recovered before petroleum revenue tax flows. Revenues are coming in already. If my hon. Friend tables a specific Question, I shall try to answer it.

§ Mr. Sproat
Will the Minister of State take every opportunity to remind the Scottish National Party and the people of Scotland that two-thirds of the oil lies off Shetland, which has no wish to be attached to an independent Scotland or a Scottish Assembly—a fact that totally undermines the economic case made, in respect of oil, by the SNP?

§ Mr. Smith
The hon. Gentleman is correct to remind the Scottish National Party and the House of that fact. It would be great folly to make the assumption that if Scotland some day became independent Shetland would not stay with the United Kingdom.

§ Mr. Viggers
Does the Minister of State accept that one of the signal failures in offshire exploration has been the failure of the nationalised British Steel Corporation to win orders for underwater pipe?

§ Mr. Smith
It is regrettable that we were not able to obtain more orders for underwater pipe. However, credit must be given to the British Steel Corporation for obtaining a large share of the onshore work.