§ 8. Mr. Skeetasked the Secretary of State for Energy what information he has about the cost of production of North sea oilfields recently brought on stream.
§ Mr. Buchanan-SmithThe average cost per barrel for fields which started production between 1980 and 1984 is estimated to be £9. The corresponding cost for fields now under development is £13.
§ Mr. SkeetDoes my right hon. Friend agree that the reduction in oil prices and movements in the exchange rate will affect the profitability of those fields and that something must be done for them? Will he recommend mergers and the rationalisation of some small firms which have applied and been successful in the ninth round?
§ Mr. Buchanan-SmithOf course if the price of oil falls that affects profitability. However, I hope that my hon. Friend will reflect on the figures that I have given. The price will have to fall a long way before the North sea becomes unprofitable.
§ Mr. RowlandsIs the Minister aware that the future lies in enhanced oil recovery from existing fields? Since nothing was done this year to encourage that development, what urgent consideration is he giving to future proposals in this regard?
§ Mr. Buchanan-SmithAs the hon. Gentleman knows, this matter was considered in the preparation for the Budget this year, and a case was not made out on the information presently available. My right hon. Friend the Chancellor of the Exchequer has invited the industry to reconsider its case, and has said that he will consider it when it is presented. The hon. Gentleman has raised an important issue.