HL Deb 27 April 1977 vol 382 cc551-4

2.43 p.m.

The Earl of LAUDERDALE

My Lords, I beg to ask the second Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government with how many of the 47 applicants offered exploration licences in the United Kingdom Continental Shelf in the fifth round have drilling programmes been approved.

Lord STRABOLGI

My Lords, none as yet. As we stated at the time of the announcement of the conditional offers to 24 applicant groups, Her Majesty's Government expect that it will take some further time for the programmes to be worked out and agreed.

The Earl of LAUDERDALE

My Lords, in thanking the noble Lord for that Answer and reverting to my previous supplementary, may I ask him this question? Would he not agree that 11 weeks have gone by since the fifth round, and that the longer the delay persists in confirming licences then awarded, the less is the incentive to invest in rigs whether they are semi-submersibles, dynamically positioned, jack-ups or what-have-you?

Lord STRABOLGI

My Lords, whatever the date of the confirmation of the conditional offers, the major part of activity this year under fifth round licences is likely to comprise seismic explorations. The amount of drilling possible will not be significant, although the Government hope that a start can be made upon it. The award of licences does not have to be delayed until all 22 groups have settled satisfactory operating agreements and work programmes.

The Earl of LAUDERDALE

My Lords is it not the case that the intervention of Bee-NOC—which I believe is the way that the noble Lord's Department will describe it but which is known to some of us as BNOC—has been a decelerating factor in North Sea exploration, and is it not also the case that to promise merely seismic work this year is a great disappointment to many of us?

Lord STRABOLGI

No, my Lords. Operating agreements are complex. Naturally, important documents of this kind cannot be settled without careful consideration by all the parties involved. I do not think that the involvement of the British National Oil Corporation has been responsible for any delay.

Lord DAVIES of LEEK

My Lords, as we have so much information about the North Sea and other seas, may I ask my noble friend what progress is being made in the Celtic Sea? As a non-avaricious and non-acquisitive Welshman, now producing Welsh whisky as well, I should like to know what oil drilling is taking place in the Celtic Sea and what is the production amount.

Lord STRABOLGI

My Lords, I am glad that I am able to tell my noble friend that, of the seven exploration wells which were drilled in the area of the Celtic Sea, the last was completed in February and that we are aware of plans to drill another four. In the light of present knowledge, it must be recognised that perhaps not all drilling obligations will be fulfilled, but it would take only one successful well to transform the picture and stimulate renewed interest in the area.

Lord HARMAR-NICHOLLS

My Lords, if I may revert to the Answer which the noble Lord gave to my noble friend—that they are experimenting with by-passing the crude oil at Sullom Voe— will not this bring about the risk of gas flaring in a way which may be dangerous?

Lord STRABOLGI

My Lords, because the crude oil has to have the gas taken out of it offshore before passing through the incomplete Sullom Voe facilities, there could well be extra gas flaring, as the noble Lord rightly surmises. This requires the Government's consent and my Department will be examining the relative advantages to the nation of early oil production as against some extra gas flaring.

Lord LEATHERLAND

My Lords, without referring to Bee-NOCs and jack-up rigs, may I ask my noble friend whether it might not be a mistake to issue too many licences too quickly and to drain the North Sea dry of oil, instead of taking a long-term view and spreading the oil recovery over a period of years?

Lord STRABOLGI

No, my Lords, I do not agree. The estimated reserves are 3,000 million to 4,500 million tonnes. The revenue expected from oil in the 1980s is expected to be about £4,250 million a year, which is very encouraging indeed and which I am sure will give great pleasure to the noble Earl opposite and to his friends.

The Earl of LAUDERDALE

My Lords, in expressing my great pleasure and that of my noble friends at the noble Lord's answer, may I ask him whether he would agree that, as against the conservationist argument put just now by the noble Lord, Lord Leatherland, we all have a common interest in maximum exploration, whatever exploitation follows?

Lord STRABOLGI

My Lords, yes, of course.