HC Deb 15 February 1988 vol 127 cc689-90
6. Mr. Irvine

To ask the Secretary of State for Energy what estimates he has made of levels of exploration and activity in the North sea in 1988.

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

I have been encouraged by the general increase in offshore activity in 1987 compared with 1986, and the figures will be published shortly in the 1988 Brown Book. I am cautiously optimistic that the recovery will continue in 1988.

Mr. Irvine

Will my hon. Friend tell the House how those levels compare with earlier levels stretching back to 1964, when exploration began? Will he confirm that the main area of activity is concentrated on the northern and central sectors of the North sea? Will he also confirm that the southern sector suffers a much less favourable tax regime, and will he tell the House what steps he proposes to take to encourage development of oil and gas reserves in the southern sector of the North sea?

Mr. Morrison

In answer to the first part of my hon. Friend's question, it is the third highest level of activity ever. Given the price of oil, which is below $20 a barrel, that is satisfactory.

In answer to the second part of my hon. Friend's question, may I say that he flatters me in thinking that I have the powers of my right hon. Friend the Chancellor of the Exchequer. The point made by my hon. Friend has already been made to me and has no doubt been made to my right hon. Friend the Chancellor of the Exchequer.

Mrs. Margaret Ewing

Against a general and welcome background of increased activity in the North sea, will the Minister give some indication of what possibility there is for security of employment in the oil fabrication yards, particularly those in Highland regions, which are major employers and, obviously, would be expecting some spin-off effects from increased activity?

Mr. Morrison

I am glad that the hon. Lady welcomes the increased activity. She will appreciate, representing Moray, that the time between exploration and development and orders from the fabrication yards is somewhat of a lead situation. One hopes that the activity will improve.

Mr. John Garrett

Now that Britoil is on the point of being taken over by BP, which is one fifth owned by Kuwaiti interests, what steps is the Minister taking to safeguard the national interests in the North sea by the use of the golden share; a share insisted on by his predecessor to ensure the independence of Britoil? What does the Minister judge the national situation to be in terms of jobs in Britoil and the exploitation of Britoil assets in the North sea?

Mr. Morrison

The hon. Gentleman cannot have been listening to what my right hon. Friend the Chancellor of the Exchequer has said. He has said that he will retain the special share so long as it is in the national interest. Talks are going on between Britoil, BP and the Treasury and they will ensure that Scottish and North sea interests are very much to the fore.