HC Deb 23 July 1984 vol 64 cc702-3
3. Mr. Wallace

asked the Secretary of State for Energy what change he expects in offshore oil production by 1 January 1987 as compared with 1 January 1984.

Mr. Buchanan-Smith

The rate of offshore crude oil production in January 1984 was 2.52 million barrels per day. By 1987 the average rate of production is expected to be in the range of 1.6 million to 2.3 million barrels per day.

Mr. Wallace

I am sure that the Minister will appreciate that we are all anxious to ensure that the level of offshore oil production continues at a reasonably high level because of the importance for onshore work of bringing new fields into production. Do the Government propose any changes with regard to future licensing to ensure a greater content of work being given to British firms than has been the case up to now?

Mr. Buchanan-Smith

What matters most of all, looking into the future and the kinds of fields that will be developed, is that the new technology that will be required to work those fields is developed and generated in the United Kingdom. I hope that the hon. Gentleman will welcome the special new conditions that I have laid down in the ninth licensing round, which should make that possible.

Mr. Maclean

Will my right hon. Friend confirm that the level of North sea oil exploration is three times higher than it was in 1980, thanks to the measures introduced by the Chancellor of the Exchequer last year?

Will my right hon. Friend further confirm reports that British industry, if it takes advantage of these measures, can have the best investment opportunity in the North sea that we have ever seen?

Mr. Buchanan-Smith

I endorse what my hon. Friend has said. Last year, a record number of wells were drilled in the North sea. In the first half of this year, even last year's good figure has been improved upon by 30 per cent. The outlook for the future is very encouraging.

Mr. Hardy

Does not the Minister's answer suggest that, even by the ed of the present Parliament, we shall witness a decline in oil production? Does that not lead the right hon. Gentleman to the view that those of us who argue for a more moderate depletion rate have common sense on our side? Can we expect to see an end to self-sufficiency in oil during the early 1990s?

Mr. Buchanan-Smith

The hon. Gentleman has ignored two things. First, all existing fields are performing better than expected. Secondly, if he had studied the estimates of new reserves he would have seen that they are at very much higher levels as a result of new work which has been done. We can look forward with optimism to future production.

Mr. Kennedy

Further to the Minister's reply to my hon. Friend the Member for Orkney and Shetlands (Mr. Wallace), does he agree that his statement about the rundown of reserves will add to the anxiety of those who, like many in my constituency, depend heavily on the onshore construction business? The Minister is to meet a delegation from Ross and Cromarty district council later this week about the current dearth of orders there. Will he have anything to tell that delegation about additional steps to be taken by the Government as the rundown takes place?

Mr. Buchanan-Smith

I did not refer to a rundown in reserves. I referred to a rundown in production as a result of the size of the earlier fields. Reserves are at a higher level than at any time, but some of the fields have yet to be discovered or developed.

At present there are potential orders worth about £150 million to £200 million, which will be available over the next 12 months for British industry to take advantage of. Provided that firms are competitive in price, quality and delivery, a large quantity of that work will come to British yards and companies.