§ The Earl of LAUDERDALEMy Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they have any proposals for encouraging British investment in the construction of drillships and semi-submersibles for charter to exploration companies.
§ Lord STRABOLGIMy Lords, the Government are conscious of the problems faced by British builders of exploration drilling ships and rigs as a result of the current worldwide recession in this market. Drillships and rigs are eligible for financial assistance under the standard provisions of the Home Shipbuilding Credit Scheme. We would give careful consideration to any proposals for additional assistance that would lead to an early order for a dynamically positioned drillship. No United Kingdom yard is currently engaged in the building of semi-submersible rigs, and in view of this, and the current world surplus in this type of rig, the Government do not envisage giving any special assistance towards the construction of semi-submersibles.
§ The Earl of LAUDERDALEMy Lords, in thanking the noble Lord for that reply, may I particularly express thanks, which I am sure will be reflected in the industry, for the information which he has given and the distinction which he has drawn between dynamically positioned drillships and semi-submersibles? But is it not the case that, at the end of the day, the demand for exploration drilling rigs depends on the early confirmation of licences which were awarded in the last round?
§ Lord STRABOLGIMy Lords, I think that that is really more appropriate to the next Question of the noble Earl.
§ The Earl of LAUDERDALEThen, my Lords, may I put that on ice for the moment and ask the noble Lord this question? Would he not agree that it is a disincentive to investment that the BNOC have a principal part in this situation which has discouraged applications for licences, so that 27 blocks were not even applied for at the last round?
§ Lord STRABOLGIMy Lords, we are at the moment talking about the construction of rigs and drillships.
§ The Earl of LAUDERDALEMy Lords, it is the demand for these which we want to stimulate. The noble Lord has agreed that there is a recession in demand.
§ Lord STRABOLGIMy Lords, I could perhaps briefly put the position to the noble Earl. He does not seem to be aware of it. There is a surplus of semi-submersibles, which are the rigs used in the North Sea. There is no use in the North Sea for DP drillships, nor at present for Type 84 jack-up rigs. But the Government have instructed the BNOC to order a jack-up rig from Marathon, for which they will then help them to find a buyer on the world markets, because it is not suitable for North Sea conditions. Also, in order to help the industry they are helping Scott Lithgow to sell and find a buyer for their third dynamically positioned drillship.
§ Lord HAILSHAM of SAINT MARYLEBONEMy Lords, if I may intervene in this mysterious dialogue, could the noble Lord explain to me—I expect that the rest of the House knows—what is meant by a dynamically positioned drill-ship, a jack-up rig and a semi-submersible?
§ Lord STRABOLGIMy Lords, I am very surprised that a former Minister of Technology should ask me that question.
§ Lord HAILSHAM of SAINT MARYLEBONEBut what is the answer, my Lords?
§ Lord STRABOLGIMy Lords, a rig is the same as a semi-submersible.
§ The Earl of LAUDERDALEMy Lords, would not the noble Lord agree that the stimulation of the production of jack-up rigs, which have been built in America for many years and used in the Gulf of Mexico and in other shallow waters, is really quite out of date for the North Sea? It is like encouraging the production of brontosauri.
§ Lord STRABOLGIOf course, my Lords; I said that to the noble Earl. What we are trying to do is to help this industry by finding a buyer in other markets.
§ Lord WYNNE-JONESMy Lords, would my noble friend agree that, as every schoolboy knows, a semi-submersible is something which can be half submerged?
§ Lord BALERNOMy Lords, can the Government give the House any information about the troubles which are causing the delays in the construction of the terminal at Sullom Voe, which is a matter of very considerable importance?
§ Lord STRABOLGIMy Lords, there have been delays in the timetable for the engineering work at Sullom Voe, and the processing plant will not start to come into operation until mid-1979. However, the constructor is making arrangements so that the terminal can handle crude oil from spring 1978 as planned, by bypassing the processing facilities and thus on this account, avoiding substantial delay in the build up of production.