HC Deb 08 May 1978 vol 949 cc748-9
2. Mr. Emery

asked the Secretary of State for Energy what consultation he has had with the Chairman of the British National Oil Corporation about the selling price of crude oil from the North Sea.

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

I am in constant touch with the chairman of the British National Oil Corporation on all important North Sea oil issues, including North Sea crude prices.

Mr. Emery

Why is it that in certain cases BNOC has undercut the price of crude which was established by the BNOC's partners in the North Sea?

Dr. Mabon

I know that the hon. Gentleman is quoting from certain reports in the Press. In fact, the commercial operations of the corporation are a matter for the corporation. The corporation and its partners—particularly if the hon. Gentleman is referring to Thistle—have a common interest in obtaining full market value. If there is a dispute between the partners, it is quite right that they should seek expert determination of price. In one case this has happened. I should like to make clear that there is no question of BNOC seeking to undercut. The hon. Gentleman must remember that the market is very sluggish and it is very difficult always to arrange these matters in a perfectly fair and reasonable way.

Mr. Dalyell

Have the Government asked the chairman of BNOC to refute in public, in detail and with conviction the recent innuendoes that have been made about BNOC?

Mr. Mabon

I am not certain which innuendoes we are talking about. If my hon. Friend is referring to the report in the Sunday Post regarding some question of misdoing, that is a matter to be reported to the proper authorities. I understand that the chairman is making a full investigation with regard to the rumours. If my hon. Friend is referring to other matters, such as the speech by Mr. Keller or the internal memorandum which was unfortunately duly leaked by one of the employees of another company seeking to criticise BNOC, that is another matter and we can deal with it quite easily.

Mr. Gordon Wilson

If the Minister is worried about the sluggish price in relation to oil, would it not be much more effective if he had meetings with OPEC rather than BNOC about oil production world-wide? Would he not consider it worth while to take the advice of the TUC about having an effective depletion policy so that when oil is imported at very expensive prices in the 1990s, as estimated, there will be oil available from Scotland's resources in the North Sea?

Dr. Mabon

That is a very easy question, the answer to which is that it is simply not the policy of the Government to be party to the OPEC arrangements, even if that was a club which was willing to have us a member. Nevertheless, we have active contacts with all the oil Ministers, but we take the view of the Western countries that it is better that the price of oil is stabilised for the present until the world economy revives.

Mr. Viggers

In view of the fact that the price at which oil is acquired by BNOC is set in advance, sometimes by a panel agreed with the oil companies and BNOC, and in view of the fact that oil prices—as the Minister himself said—are sluggish, how will BNOC avoid making a loss on transactions in oil?

Dr. Mabon

BNOC must seek to behave commercially. That means looking after the interests of the shareholders, namely, ourselves. At the same time, as I have indicated, it is important that BNOC maintains a very good relationship with all its partners.