HL Deb 26 July 1973 vol 344 cc1946-8

11.45 a.m.

LORD BALOGH

My Lords, I beg leave to ask Her Majesty's Government the Question of which I have given Private Notice:

To ask Her Majesty's Government what are the prices and conditions contained in yesterday's agreement between the Gas Council and the operators of the Frigg field and why the powers of arbitration possessed by the Secretary of State for Trade and Industry in respect of the British portion of the field were not invoked.

THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)

My Lords, prices and conditions negotiated for the purchase of gas from the Frigg field are a matter for the British Gas Corporation and the operators.

LORD BALOGH

My Lords, will the Minister agree that his Answer is strictly contrary to the spirit of the promise that the Government will not issue licences and tolerate agreements before the review of the whole North Sea gas and oilfield question has been completed and the results have been debated in both this House and the other place?

LORD DRUMALBYN

My Lords, we are not talking about new licences here; we are talking about supply from an existing licence holder. It may help the noble Lord if I say that the Government were aware of the limits within which the British Gas Corporation intended to negotiate, and we saw no reason to disagree with the British Gas Corporation's commercial judgment.

LORD BALOGH

My Lords, is it not quite evident that if the Gas Council has agreed to a price which did not make the Frigg field operators appeal to the Minister for arbitration, then that price must have been too high?

LORD DRUMALBYN

My Lords, I should not have thought so, because both parties have to judge where the commercial interests lie. Perhaps I may say to the noble Lord that I should have expected him to welcome very much—as I am sure we all do—the announcement that was made in the Press this morning that the British Gas Corporation had successfuly negotiated for the entire supply of gas from both the United Kingdom and the Norwegian sectors of the Frigg field, to come to this country. It is a matter for great gratification.

LORD AVEBURY

My Lords, while I am sure that the Minister is correct in saying what he has said about the price agreed between the Gas Council and the operators of the field, may I ask whether it has not always been the practice hitherto for Ministers to answer direct questions put to them on prices? Is he not aware that we all know how much was paid for the gas from Hewitt and Indefatigable; and why should not the House be given the same information in respect of Frigg?

LORD DRUMALBYN

My Lords, for one thing, this is a matter which has appeared in the papers only this morning. It would be very unusual for information about prices to be given at that stage. In fact, in this case it is not possible to give it because the contracts between the British Gas Corporation and their various suppliers are subject to confirmation. So far as the Norwegian side is concerned, I understand that they are subject to the consent of the Norwegian Government, because of the fact that the gas is not going to Norway but is coming to this country.

LORD BALOGH

My Lords, is the Minister aware that the Financial Times has stated this morning that we are going to pay about twice the price which we have paid hitherto? Is he also aware that the Russians have just re-negotiated their Persian purchases, in respect of which they agreed to only a 3 per cent. increase, and in effect, the price is about half of what the old price was?

LORD DRUMALBYN

Yes, my Lords, but circumstances differ. In his Question the noble Lord referred to "prices and conditions" and the terms involved are inseparable from prices. I am told that the contract is a very considerable document.