HC Deb 02 November 1987 vol 121 cc638-40
7. Mr. Chapman

asked the Secretary of State for Energy what is his latest estimate of United Kingdom oil reserves; and how this figure compares with one and five years ago.

The Minister of State, Department of Energy (Mr. Peter Morrison)

The latest estimates of remaining recoverable oil reserves in discoveries made to date on the United Kingdom continental shelf are between 710 million and 2,050 million tonnes; this compares with an estimate of between 750 million and 1,880 million tonnes one year ago, and an estimate of between 1,050 million and 2,300 million tonnes five years ago.

Mr. Chapman

In the light of those figures, does my hon. Friend agree that the encouragement of oil exploration must remain the topmost priority? Is he satisfied with the number of applications coming forward? Perhaps he can tell the House how many he has received and how many he has approved in, for example, the past year.

Mr. Morrison

I agree entirely with my hon. Friend. The Government's policy is to encourage, in so far as it is possible, further oil exploration. I am never satisfied, but the figures for this year for development plans are that we have approved 10 new oilfield developments, and a further 11 are under consideration.

Mr. Kennedy

What is the implication of those figures for onshore fabrication yards such as Highland Fabricators in Nigg? We were pleased that the Minister took the trouble to visit that yard during the parliamentary recess. That yard, a major employer in my constituency and in the constituency of my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), is currently experiencing a rundown of employment because of the changing nature of the orders in the North sea and the contracting nature of the prospects for tendering at present.

Mr. Morrison

I learnt a great deal from my visit to the fabrication yards. I appreciate now, if I did not before, the difficulties to which they have been subjected, which have come about in principle because of the drastic cut in the price of oil. We are doing everything we can to encourage orders to go to the yards, through the Offshore Supplies Office. We will continue to do that, and, as I said in my previous answer, the fact that development plans are coming forward and have been approved and that further development plans are being considered are moves in the right direction.

Mr. Hannam

Will my hon. Friend congratulate that private sector industry on the huge success of its developments in making this country self-sufficient in oil for so many years? Will he press the Treasury to ensure that the tax regime is developed in a way that will encourage continuing exploitation of the reserves in the North sea, especially the secondary depletion of existing oilfields?

Mr. Morrison

I agree with my hon. Friend. What has been achieved by the private sector in the past 25 years in the development of the United Kingdom continental shelf is perhaps beyond our wildest hopes and aspirations 25 years ago. Everybody involved is to be applauded. My hon. Friend will appreciate that the tax regime is a matter for my right hon. Friend the Chancellor of the Exchequer, but, in so far as I can and where it is necessary, I assure my hon. Friend that I act as a conduit of information to my right hon. Friend the Chancellor, who will take my hon. Friend's points into account when he forms his Budget.

Mr. Rowlands

Despite the talk of a possible new boom in the North sea, is the Minister aware of the plight of some British-owned supply companies? Is he aware that the share that the British-owned companies have is far less than the much-vaunted and much-quoted figure of 80 per cent. of orders? The report of the Select Committee states that the figure is less than a half. What specific measures does the Minister have to bring forward on the development of contracts for British-owned supply companies in the North sea?

Mr. Morrison

The hon. Gentleman will appreciate that the work done by the Offshore Supply Office, well before my time, has increased the United Kingdom content of all the services, all the fabrication, and so on, that go into the North sea. That has been done on a consistent and continuing basis, and it is something that my right hon. Friend the Secretary of State and I will continue to pursue vigorously. As the hon. Gentleman will appreciate, it is difficult to discriminate between United Kingdom-owned and United Kingdom-based companies. I hope he will agree that the most important thing is to ensure that employment should arise because the United Kingdom-based companies get the orders.