North Sea Oil

HC Deb 20 March 1978 vol 946 cc959-62

12. Mr. Litterick

asked the Secretary of State for Energy what is the tonnage of crude oil brought ashore from the North Sea oilfields during the latest six months for which figures are available; and what was the figure for the previous six months.

Dr. J. Dickson Mabon

Nearly 21 million tonnes of United Kingdom Continental Shelf crude oil were brought ashore during the six months ending January 1978. This compares with about 18 million tonnes during the previous six months.

Mr. Litterick

I am grateful for that answer. When does my right hon. Friend expect the North Sea fields to peak in terms of deliveries? What percentage of our total energy consumption at that time will that peak output represent?

Dr. Mabon

That is an easy question. We hope to reach self-sufficiency in the calendar year 1980 and that we shall sustain self-sufficiency right through the 1980s. By how much we will be in excess of self-sufficiency—that is about 100 million tonnes—it is difficult to say, but it might be about as much as 20 million tonnes, 30 million tonnes, or even 40 million tonnes. It is very difficult to make a decision about the 1990s.

Mr. Patrick McNair-Wilson

The Minister has expressed concern about the level of exports of North Sea oil. Is he satisfied that these are in the right sort of parameters?

Dr. Mabon

No. We hoped that we should try to find up to two-thirds in the United Kingdom. At present the figure is running, over the past 12 months, at 58 per cent. That is still within the phrase "up to two-thirds", but "up to two-thirds "means" up to two-thirds". It is largely a matter of the nature of the market. The market for low sulphur oil, such as we have in the United Kingdom, is extremely attractive and it is therefore very difficult to influence the position of exports.

14. Mr. Tim Renton

asked the Secretary of State for Energy whether he will institute an investigation of the likely yield to the National Oil Account from North Sea oilfields in the years 1978, 1979, 1980 and 1981; and whether he will publish the results in theOfficial Report.

Dr. J. Dickson Mabon

The latest forecasts of yield from royalties on North Sea oil and gas were set out in the answer by my right hon. Friend the Financial Secretary to the Treasury to the hon. Member for Croydon, Central (Mr. Moore) on 21st November 1977.

Mr. Renton

Subsequent to that, to what extent are the newspaper reports correct that the yields to the National Oil Account are proving much less, thanks to increased tax allowances being claimed by the oil companies? Is it, for example, correct to say that the yield to the National Oil Account this year will be less than the financial losses of the British Steel Corporation?

Dr. Mabon

As I do not know the answer to either of those questions, I cannot answer one way or the other to either. I would merely say to the hon. Gentleman that we have to accept that we are still in the development phase in the North Sea and the oil companies rightly deserve the tax allowances that we have given to them in order to develop the fields commercially and properly. It may mean that there will be some delay in gathering in the tax moneys, but the figure of £5 billion of tax collection up to 1982 remains as confirmed in the reply given on 21st November 1977.

Mr. Hardy

Is it not the case that there could be some serious disadvantages as a result of the most unsatisfactory arrangements made during the fourth round licensing for which the Tory Government were responsible and that some blocks negotiated in that round have still not been developed as a result of those unsatisfactory arrangements?

Dr. Mabon

That is very true. It will be seen from the hand-back of the fourth round blocks which we got only in the last week or so that we have not had the uptake that we should have had. We expect the fifth round to be much more successful than that.

Mr. Gray

Will the Minister clarify the point that he made just now when he quoted the figure of £5 billion? I think he said 1982, but should he not have said 1980? If he does not know the answer, will he agree that it is now time that a ceiling was put on the amount to which the National Oil Account could grow, so that over a given ceiling the revenue would automatically be transferred to the Treasury?

Dr. Mabon

I should not like to answer the second part of the hon. Gentleman's supplementary question without notice. On the first part, yes, I meant to say 1980. I thought I said 1980, but if I said 1982 I apologise.