HC Deb 29 November 1976 vol 921 cc454-6
5. Mr. Aitken

asked the Secretary of State for Energy if he will make a statement on the progress of the allocation of fifth-round offshore exploration and production licences in the North Sea.

23. Mr. Ioan Evans

asked the Secretary of State for Energy if he will report on the recent round of offshore licensing and proposals for the granting of further licences.

Dr. J. Dickson Mabon

My right hon. Friend is examining the 53 applications received, and will make an announcement when decisions are made on the award of licences.

Mr. Aitken

Does the Minister agree that it is essential that British operating companies get a fair share of these licences? Does he also agree that it must be a case not just of preferential treatment for the State-owned British giant companies but of fair treatment for the smaller British exploration companies, without whose participation in the next round there would be a great loss of British expertise in offshore drilling and exploration work?

Dr. Mabon

The answer to the first part of the hon. Gentleman's question is "Yes". On the second part, we have laid down definite criteria which have been published and which were the subject of applications which came in on 5th October. I hope that many of the smaller companies will participate. It depends on which blocks they have asked for and in what circumstances. It is complicated.

Mr. Evans

Does my hon. Friend agree that when considering British companies he should also consider the British National Oil Corporation? Does he think that BNOC should just have not a minimum 51 per cent. shareholding but, where appropriate, a 100 per cent. shareholding, so that any benefit of this development can be returned to the people?

Dr. Mabon

In each application that is agreed BNOC will have a 51 per cent. share and the option of exploring and/or developing as a 51 per cent. partner of the successful applicant. BNOC has taken on board substantial commitments on participation—which we are literally signing today and tomorrow and in the next few weeks—with large companies and consortia. BNOC has a formidable programme in building up expertise. Considering that it was set up only 11 months ago it is doing a remarkable job. It has control of some of the blocks inherited from previous participation agreements.

Mr. Donald Stewart

Does the hon. Gentleman accept the view of the Daily Record poll, which showed that a substantial majority of Scottish people are eager to retain Scottish oil revenues? Should not arrangements be made for an orderly transfer of production licences and revenues in due course?

Dr. Mabon

I did not catch the last part of the hon. Gentleman's question nor do I want to. Having been a contributor to the Daily Record in its most successful period of expansion in Scotland in nine years. I would say that licences should probably go to the Daily Record.

Mr. Heffer

Will my hon. Friend ignore the Scottish National Party, which is using the same script that we have heard for the last two years since Members of that party came to the House? In view of the report by Professor Odell, will he indicate that in future we shall get the greatest advantage from allocation and that it should go to those companies that perhaps make less profit but benefit the country more?

Dr. Mabon

My hon. Friend must accept from me that I have a great regard for Professor Odell. Many of his criticisms in the past have been not ill-formed, as some have said, but quite sensible. His book is a very important one, which cannot be commented upon off the cuff. Therefore, we are taking the matter very seriously. We are inquiring, quite rightly—I hope that hon. Members will do likewise—into the remarkable assertions that he makes with regard to the exploitation of fields, the number of jobs involved, and the amount of oil that may be lost.

Mr. Macfarlane

Is the Minister totally satisfied that the progressive nationalisation policies of his Government have not totally deterred foreign investment in North Sea exploration?

Dr. Mabon

That is patently absurd. First, 133 companies have been involved in the applications in a very small round of North Sea licensing as compared with the previous round. That shows interest. Secondly, there is no such evidence from the financial centres. I have been involved with my right hon. Friend in discussing these matters with financiers who are concerned in the raising of money for the North Sea. Contrary to what the hon. Gentleman suggests, people are anxious to invest.