HC Deb 23 March 1981 vol 1 cc617-8
5. Mr. Dykes

asked the Secretary of State for Energy if he will make a statement of his policy of allocations of seventh round exploration licences to smaller independent companies, including those registered in the United Kingdom.

Mr. Gray

The invitation to apply for seventh round licences detailed the criteria against which all applications would be examined. Many of the applications, including smaller independent companies, were successful, and a good number of such companies were British.

Mr. Dykes

I congratulate my right hon. Friend and the Government on encouraging the independents in the latest allocations and groupings. Is my hon. Friend satisfied that the extra financial and fiscal burdens facing all oil companies will not make it that much more difficult for them over the next few years to get down to drilling and new discoveries, against the background of anxieties that are beginning to develop that, unfortunately, the reserves may not last for as long as some optimists believe?

Mr. Gray

I remind my hon. Friend that none of those who have applied for licences has failed to take them up. I accept that there is anxiety and that nobody likes taxation, but I believe that the taxation being imposed on the oil companies is fair, and will be seen to be fair, and that the North Sea will continue to be one of the most attractive investment areas in the Western world.

Mr. Rowlands

Was not the proportion of operator-ships given to United Kingdom companies far lower in the seventh round than in previous rounds? Will that not do considerable damage to United Kingdom industrial involvement in the North Sea oilfields?

Mr. Gray

No, I do not agree with the hon. Gentleman. Indeed, the number of operatorships in the private sector is substantially higher. Moreover, I am glad to be able to tell the House that in the seventh round six small independent companies have obtained operatorships.

Mr. Budgen

Will my hon. Friend explain why these licences cannot be sold by auction, as such a system would, first, reduce the dangerously wide discretions exercised by his Department and, secondly, raise much needed revenue, without recourse to the fashionable fallacy of retrospection?

Mr. Gray

I do not agree with my hon. Friend. The discretion to which he refers is important for British industry. It is right and proper that companies that have given full and fair opportunity to British industry to participate should be in a position to have that discrimination exercised in their favour.

Mr. Douglas

Will the Minister give an assurance that his licensing and taxation policy will not endanger essential orders coming to United Kingdom companies, particularly British Shipbuilders? Will he give a specific assurance that any further development of the Claymore field by Occidental Oil will be carried out by United Kingdom-based equipment?

Mr. Gray

Obviously I cannot give the hon. Gentleman an absolute assurance of that kind, but I can tell him that the operators are well aware of the Government's wish that as much benefit as possible should come to British industry, from wherever the exploration is taking place.

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