§ 2.46 p.m.
§ The Earl of LAUDERDALEMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government how many exploration drilling rigs were working in the British sector of the Continental Shelf in October 1977, and October 1978, respectively.
§ Lord STRABOLGIMy Lords, there were 16 mobile drilling rigs engaged in offshore drilling on 30th October 1978, plus one engaged in onshore drilling. This compares with 26 engaged in offshore drilling, plus one engaged in onshore drilling, at the same time last year.
§ The Earl of LAUDERDALEMy Lords, in thanking the noble Lord for that reply, I wish to ask him whether he is aware that my Question related to exploration drilling? Is he aware that he appears to be taking the same line as did the Minister of State in another place yesterday in confusing the figure for exploration drilling with the figure for appraisal drilling? My Question related to exploration.
§ Lord STRABOLGIMy Lords, of the 16 mobile rigs active offshore, nine were engaged in drilling exploration wells, 410 four in drilling appraisal wells, and three in drilling development wells.
§ The Earl of LAUDERDALEMy Lords, is the noble Lord aware that his figure of nine—which is what I was asking for—compares with 26 in the same period last year?
§ Lord STRABOLGIMy Lords, during 1977—particularly the second half of the year—the companies undertook a substantial amount of drilling for relinquishment purposes under the fourth round initiated by the noble Earl's Government, and so some decline from the previous year's extremely high level of activity was to be expected.
§ The Earl of LAUDERDALEMy Lords, I thank the noble Lord for that reply, which I am sure he will know I expected. Is he aware that it is a matter of some surprise that this year's exploration drilling includes only four rigs drilling under the latest round, the licences for which were provisionally allocated about 16 months ago?
§ Lord STRABOLGIMy Lords, there is simply less territory under licence, and much of it has already been partially explored; so I agree that the companies are adopting a more cautious attitude.
Lord CAMPBELL of CROYMy Lords, is the noble Lord aware that, however many licences there are, much oil is likely to remain below the North Sea because it will not be economically worth while for marginal fields to be developed unless the Government change their present attitude?
§ Lord STRABOLGIMy Lords, I do not think that the argument of the noble Lord is supported by the successful response to the sixth round of licences. Ninety-four companies applied, and there was a hundred per cent. response.
Lord CAMPBELL of CROYMy Lords, is the noble Lord aware that the situation precisely conforms with what I said? I said that however many licences are applied for and are granted, it is a quite different matter whether or not the fields that are later discovered are developed. Is the noble Lord aware that North Sea oil may be a gift from God, 411 but it is likely that it would not have been discovered until the next century had not international resources of technology and finance been used?
§ Lord STRABOLGIOf course, my Lords, the crux of the problem is depletion control, and how it should be exercised. The Energy Commission are looking at this problem. They looked at it at their meeting on 1st December, and they will discuss it again within the broad framework of energy policy as a whole.
§ Lord AVEBURYMy Lords, quite apart from the inadequacy or otherwise of the incentives to the companies to explore in the North Sea, is it not likely that, as the major oil provinces have been discovered and explored, the rate of drilling will decline? Do the Government think that we are now at the stage where the activities of the companies in the way of fresh explorations could for that reason be expected to decline?
§ Lord STRABOLGIMy Lords, that may be one of the reasons—I do not know—but I may tell the House quite frankly that the Government take this decline in activity very seriously. The Department of Energy is presently engaged in discussions with the industry in an attempt to throw further light upon the reasons behind it.
§ Lord WYNNE-JONESMy Lords, would my noble friend not agree that there may be a positive advantage in delaying the exploitation of oilfields, rather than exploiting them now, when there is a glut of oil? In another 20 years' time there will be a scarcity of oil. Therefore, is there not a positive advantage in delaying exploitation?
§ Lord STRABOLGIYes, of course, my Lords; and this is one of the factors which was gone into very thoroughly in the Government's Green Paper on Energy Policy. I must say that the important thing is that this Government, by the arrangements we have made, are able to control the depletion, which was not so in the case of the arrangements made by the previous Administration.
§ The Earl of LAUDERDALEMy Lords, could the noble Lord enlarge on 412 his previous reply, when he referred to the increasing caution of companies, and say whether the fact that exploration drilling is now taking place on only four out of the 44 blocks licensed 18 months ago is due to the British Government's application of a policy of depletion, or is it just bureaucracy and delay?
§ Lord STRABOLGIMy Lords, I do not think there is any bureaucracy or delay. Why should this country be the only one in the world that does not control its own oil?
§ Lord HAILSHAM of SAINT MARY-LEBONEBut, my Lords, will the noble Lord not reflect upon the extent to which his answers are inconsistent with one another? Does he not realise that, by saying that he is taking the shortage of exploration drills very seriously indeed, he is saying one thing, and that, by replying in a reassuring way to his noble friend that there is great virtue in not exploiting oil, he is saying another?
§ Lord STRABOLGIMy Lords, what I said was that all these factors were being considered by the Energy Commission and were being discussed with the oil companies.
§ Lord HANKEYMy Lords, could the noble Lord give any sort of breakdown of the interesting figures he has given the House as to the drilling rigs which are in operation on the East of the United Kingdom and those which are in operation on the West and South-West?
§ Lord STRABOLGIMy Lords, I can say with regard to the Celtic Sea that 14 wells have been drilled, but no oil has been discovered so far.