HC Deb 04 July 1977 vol 934 cc864-6
6. Mr. Canavan

asked the Secretary of State for Energy when he next expects to meet the Chairman of the British National Oil Corporation to discuss further participation in the oil industry.

Mr. Benn

I have very frequent meetings with the Chairman of BNOC, the most recent of which was this morning, at which we discuss participation amongst other matters. I met the members of the Corporation in Glasgow on 24th June.

Mr. Canavan

As part of the reason for public participation in the oil industry is to ensure better employment prospects, will my right hon. Friend tell the BNOC and BP that it is absolutely intolerable that hundreds of workers' jobs are at risk in the offshore oil construction industry, on Clydeside and elsewhere, at a time when we hear reports that 500,000 man-hours of work for the Sullom Voe project are being done in yards in Holland?

Mr. Benn

My hon. Friend will know that when I was in Glasgow last Friday week I took the opportunity of having a meeting with the Offshore Supplies Office and the Confederation of Shipbuilding and Engineering Unions and the management and unions from John Brown Engineering. I followed that up with a meeting on the following Monday with BP, and further meetings took place during the course of the week. It is the function of the Offshore Supplies Office to see that full and fair opportunity allows British firms to compete. This is a continuing function of the Department and of the OSO. My hon. Friend will also know that in the case of Marathon an order for a rig was placed by BNOC, in pursuit of the objectives that he and I share.

Mr. Tom King

As the criticism referred to by the hon. Member for West Stirlingshire (Mr. Canavan) originated from Mr. Gavin Laird, a director of BNOC, and was referred to by me during the energy debate, when I also drew the right hon. Gentleman's attention to the fact that BNOC had not ordered a single British supply ship, what further investigation has the right hon. Gentleman made into the matter?

Mr. Benn

My right hon. Friend the Minister of State, in winding up the debate a few days ago, gave a very clear immediate answer, which was that BNOC inherited from the Burmah Oil Company—BODL—a pattern of use of supply ships. In the light of what the hon. Gentleman said, immediate inquiries were initiated, and I shall inform the House of the results as soon as possible.

Mr. Ioan Evans

Has my right hon. Friend seen the report which states that oil production will exceed requirements by 1979? In view of the great benefit to Britain that flows from this oil, will he give an assurance that there will be maximum participation in ownership of the offshore oilfields, and will he refuse the persistent Opposition demands to sell it off to foreign interests and oil companies abroad?

Mr. Benn

The fifth round licences, which were the first of the licences for which the British Government were responsible, are on the basis of a genuine 51 per cent. equity. Helped largely with the petroleum revenue tax and the royalty in oil, this will mean that 85 per cent. of the revenue from the fifth round licences will accrue to the British taxpayer and the British Treasury through the national oil account. That is not a bad achievement.

Mr. Rost

Will the right hon. Gentleman confirm that BNOC has made a request to him to have favourable treatment in the allocation of new licences? Will he further confirm that in no circumstances will he grant such an unfair trading concession, particularly as his predecessor gave a categorical assurance, not only to this House but to the industry, that this would not happen?

Mr. Benn

I referred to that matter in the debate last week, and the reference can be found in Hansard. The difference between the present position and the position some time ago is that we now have a State oil corporation, able and empowered by Act of Parliament to take part in every part of the oil business, here and abroad. If we are to make sense of the powers that we now have in the national interest, it would certainly be right for me to consider most seriously proposals for sole licences. No decision has yet been reached. It might be a very good way of develop- ing a conservation policy which would allow us to know where the oil was and then develop it to suit our own national interests.

7. Mr. Gordon Wilson

asked the Sec retary of State for Energy if he will issue a direction to BNOC regarding its com pliance with the terms of the Continental Shelf (Jurisdiction) Order 1968.

The Minister of State, Department of Energy (Dr. J. Dickson Mabon)

No, Sir. The jurisdiction orders operate, in those matters which they govern, independently of any policy adopted by BNOC and other licensees. No direction is needed.

Mr. Wilson

Is the Minister of State aware that the BNOC is operating in defiance of Parliament under the order by not using Scots law in relation to these oilfields, which clearly lie within Scottish jurisdiction of the North Sea? What is he going to do about this betrayal of the Scottish legal system, which was guaranteed by the Treaty of Union?

Dr. Mabon

No, Sir, I am not aware of that, because it is not true. The BNOC is perfectly at liberty, with the other companies concerned, to apply Scots law to its contracts, or English law, and it does so. If the hon. Gentleman has any information to the contrary, perhaps he will get in touch with me.