HC Deb 26 July 1982 vol 28 cc730-2
5. Mr. Knox

asked the Secretary of State for Energy what discussions his Department holds on a regular basis with the major oil companies; what subjects are discussed; and when the next meeting will take place.

The Minister of State, Department of Energy (Mr. Hamish Gray)

My Department frequently meets the oil industry in order to discuss a wide range of subjects and will continue to do so.

Mr. Knox

Have the violent fluctuations in petrol prices in recent years been raised in the discussions with the companies, and has their attention been drawn to the public concern that these price movements have caused? Is it possible to take some action through, for example, the European Community?

Mr. Gray

I appreciate my hon. Friend's point, but I remind him that harmonisation within the Community was designed to remove dependence on oil and to try to establish common principles for energy pricing. United Kingdom prices net of tax are currently the lowest in the European Community. Alignment of United Kingdom prices to Continental levels would mean a substantial increase in United Kingdom prices.

Dr. J. Dickson Mabon

Has the Minister been told by the companies that the fall in the oil profile in the late 1980s and early 1990s will mean that we shall lose net self-sufficiency in Great Britain and that about five medium-sized fields will have to be approved every year if we are to keep pace with demand? Will the Minister tell us exactly what will happen about annex Bs?

Mr. Gray

My information does not tally with that of the right hon. Gentleman. The highest level of exploration since 1977 has been achieved on the United Kingdom continental shelf this year. More exploration wells were drilled in the first half of the year than in the first half of last year. If this rate of activity continues for the rest of the year, a new record could be set in 1982. The Department is in discussions with the licencees of North Alwyn and Clyde. I expect the licencees to submit their projects for approval shortly. Consequent orders should be placed before the end of 1984.

Mr. Rowlands

When the right hon. Gentleman next meets the oil companies, will he be hawking around the secret report on the valuation of Wytch Farm, made, apparently, at a cost of £100,000? Will the Select Committee have the chance to examine the report before the sale takes place so that the House can made a judgment on whether there is again to be a forced sale at a knockdown price to remove an important asset from the nation and from British Gas?

Mr. Gray

That is a matter for the British Gas Corporation. I am sure that the hon. Gentleman appreciates that.

Mr. Eggar

Does my right hon. Friend appreciate that while exploration is an indication of the general level of activity, development is what really matters? Is he not concerned that the Treasury's need for money is overcoming the national interest in getting fields developed, especially in the interests of creating employment?

Mr. Gray

I cannot accept that. My right hon. and learned Friend the Chancellor of the Exchequer has a difficult task in balancing the scales of justice and ensuring that the nation gets its due in the national interest, while at the same time not removing incentives from oil companies to invest in the North Sea. I do not agree that the companies are postponing the development of an oilfield. If that has taken place, taxation has been only one element in the decision. It is one that usually comes a poor third.

Mr. Douglas

When the right hon. Gentleman next meets the representatives of Shell and Esso, will he put it to them that the use of the ICI case, which is now before the courts, as an excuse for a reappraisal of the cracker and NGL plants at Moss Morran will be wholly unacceptable to the people of Fife?

Mr. Gray

I am aware of the hon. Gentleman's very great interest in these matters, which are near to his constituency. I can assure him that any such suggestion from Shell and Esso will not be greeted with any sympathy.

Mr. McQuarrie

When my right hon. Friend next meets the oil companies, will he try to impress upon them the absolute necessity for an adjustment in the prices of fuel in rural areas, because at present, as my right hon. Friend is aware from his constituency, the prices are devastating and causing a great deal of concern throughout all the rural areas in Scotland?

Mr. Gray

I know that my hon. Friend is concerned about rural constituencies, as I am. The wholesale price disparity, which remains less than the retail disparity, is likely to narrow as the companies reintroduce temporary sales allowances. Department of Energy officials have been anxious for them to be reintroduced. I am glad to be able to tell the House that one major oil company this weekend reintroduced temporary sales allowances, which should substantially benefit rural areas. I trust that other companies will follow.