HC Deb 28 February 1983 vol 38 cc14-5
16. Dr. J. Dickson Mabon

asked the Secretary of State for Energy if he will meet the chairman of Britoil to discuss the development of marginal fields.

Mr. Gray

I frequently meet the chairmen of private sector oil companies, and development of marginal fields has from time to time been discussed.

Dr. Mabon

In view of the Secretary of State's announcement today that he is disposed to encourage the speedy promotion and development of marginal fields, may I take it that a more sympathetic and considerate fiscal regime—it has been changed five times since the Government came to office—will be included in the Budget to encourage oil companies and their chairmen, including the chairman of Britoil, to bring forward urgent proposals to maintain national self-sufficiency in five years' time?

Mr. Gray

The right hon. Gentleman, who has done my job, knows that comments on Budget matters are taboo at this stage of a Parliament. Oil companies have made representations to my right hon. Friend the Secretary of State for Energy and my right hon. and learned Friend the Chancellor of the Exchequer. We shall have to wait and see whether they bear fruit.

Mr. Durant

Will my right hon. Friend discuss the taxation of North sea oil with the Chancellor, because if it is set too high it could affect investment in marginal and new fields?

Mr. Gray

I assure my hon. Friend that such matters have been discussed on a number of occasions.

Mr. Douglas

Will the right hon. Gentleman note the relationship between the development of marginal fields and depletion policy? Does he agree that we must be anxious about the fact that in the North sea the bigger and better fields are being developed apace? Therefore, we need an incentive, fiscal or otherwise, to get the marginal fields appraised so that we can achieve security of supply as far into the future as possible.

Mr. Gray

I do not disagree with the hon. Gentleman. We accept that it is important that marginal fields are developed. On the other hand, I remind him that the Select Committee on Energy has endorsed the Government's depletion policy.

Mr. Rost

Does my right hon. Friend agree that a large drop in oil prices would make some of the existing North sea fields marginal and make most of the new developments completely uneconomic? As we are a major producer and exporter, is it not in our interests to cooperate with other producers to see that the free market is orderly and does not become a complete shambles?

Mr. Gray

My hon. Friend makes an important point. I assure him that the Government are looking at every possible way of ensuring that marginal fields are developed.

Mr. John Smith

Bearing in mind that it has been known for many years that there would be a fall in British oil production from about 1985 onwards, why have the Government done almost nothing for four years to assist marginal field development and still do not seem to know what to do as they enter their fifth year in office?

Mr. Gray

The Government followed the marginal fields policy that they inherited from the Labour Government. Perhaps we should not have accepted it so willingly and should have reconsidered it earlier. The tax changes were fully supported by Labour Members, although it seems that some have been having second thoughts in recent weeks and months.