HC Deb 25 March 1991 vol 188 cc597-8
11. Mr. Teddy Taylor

To ask the Secretary of State for Energy what is the total amount of oil produced from United Kingdom land and waters in the most recent annual period for which figures are available; and what he anticipates will be the change in this level of production.

Mr. Moynihan

In 1990 oil production from the United Kingdom continental shelf was 91.6 million tonnes. I expect that by the mid-1990s, output will be significantly higher.

Mr. Taylor

Does that remarkable total mean that Britain is still self-sufficient in oil—that we produce more oil than we consume? Can the Minister give us an estimate of how long he expects Britain's oil reserves to last?

Mr. Moynihan

On the latter point, I believe that those reserves will last well into the next century. On the first question, with the exception of low production in the second quarter, due primarily to safety-related platform shutdowns, oil trade for 1991 is expected to show a significant surplus. I believe that that surplus will continue.

Mrs. Margaret Ewing

Although I welcome the increase in production, has the Minister taken steps to ensure that orders for the modules, jackets and platforms are allocated to British companies? Is he aware that recently two major contracts went to Norway? I represent a constituency which depends greatly on the offshore fabrication yards and I should welcome a clear statement from the Government on their intentions in that respect.

Mr. Moynihan

Only last week I visited Highland Fabricators and McDermotts and I believe that the outstanding contribution that the workers in those yards make to high-quality fabrication will ensure that they have an important role in the future.

There is additional competition coming from mainland Europe, not least because many of the yards are working at capacity with a high level of activity in the market. I assure the hon. Lady that last year, on the most recent figures published, 98 per cent. of orders on the United Kingdom continental shelf for the specific items to which she referred were placed with United Kingdom companies.

Mr. Bowis

Does my hon. Friend accept that the price of oil will justify in the foreseeable future the exploration and drilling in the deeper waters west of the Shetlands?

Mr. Moynihan

We are extremely pleased with the response to the frontier round, the first of its type, which covers the area to which my hon. Friend referred. I am confident that the interest shown—there have been 13 applications, involving 53 companies—is a reflection of the buoyant prospects that the frontier round presents to the oil and gas sector.

Mr. Wilson

Will the Minister translate the expected quantities of oil into oil revenue? Does he accept that many of us believe that the most astonishing feature of the past decade and more has been that the vast revenues to the Government from oil production in the North sea have not been matched by industrial regeneration in many parts of Scotland and the United Kingdom? Will he accept it from me that under the next Labour Government the income from oil will be spent on regenerating the British economy and not squandered as it has been in the past decade?

Mr. Moynihan

I totally reject the hon. Gentleman's concluding remarks. Oil revenues undoubtedly have played an important part in industrial regeneration.

The hon. Gentleman will know full well that it is impossible to predict prices for one month, let alone throughout the 1990s. We can, however, create a stable fiscal and regulatory framework that enables companies that work in the North sea to exploit our resources, through the licensing round, given the available opportunities. I am confident that that will lead to growth in an already buoyant sector.