HL Deb 27 June 1979 vol 400 cc1487-9

2.48 p.m.

The Earl of LAUDERDALE

My 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 what steps they will now take to reverse the recent decline in interest by private enterprise oil companies in exploration of the United Kingdom Continental Shelf.

The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie)

My Lords, Her Majesty's Government recognise the importance of encouraging further exploration on our Continental Shelf, and to this end, as a first step, have recently announced that the public corporations would no longer have first option on assignments of licence interests. Her Majesty's Government keep the rate of exploration under review, and are considering whether additional steps are needed to encourage exploration.

The Earl of LAUDERDALE

My Lords, I thank the noble Earl for that reply and for a more informative reply than we used to receive when we sat on the Opposition Benches and put similar Questions, but may I ask him whether he would not consider that the flat increase in PRT, without any particular exemption for marginal fields, is a disincentive to further private enterprise interests?

The Earl of GOWRIE

My Lords, I thank my noble friend for his rather controversial expressions of gratitude; nevertheless, the Government do not feel that the package as regards PRT will act as a significant disincentive to new exploration or development. Higher oil prices should stimulate exploration for new reserves and the North Sea fiscal regime already contains features to assist the exploration of marginal fields.

Lord STRABOLGI

My Lords, will the Government confirm that they will continue the previous Labour Government's policy of a 51 per cent. participation by BNOC and adequate control over our national oil reserves?

The Earl of GOWRIE

My Lords, I think it is highly unlikely that the Government would continue policies simply because they were the previous Labour Government's policies. They will continue policies if they hold them to be in the interests of the exploitation of our national resources.

Lord STRABOLGI

My Lords, will not the noble Earl agree that it was only because of the previous Labour Government's policy that the present Government are now able to make arrangements to accept oil in kind rather than in cash?

The Earl of GOWRIE

No, my Lords, I do not agree with that.

Lord WYNNE-JONES

My Lords, although I congratulate the noble Earl on occupying his present position and on speaking for the Government on energy, perhaps I may express my regret and that of others, that the Prime Minister did not see fit to appoint a Minister for Energy from this House. Does the noble Earl consider that the fall-off in the ratio of wildcats to actual discoveries has not been the main reason for the decrease in interest shown by companies in exploration? Can he confirm that in 1974 there were 3.4 wildcats per discovery, whereas in 1977 that figure had dropped to 5.8 wildcats per discovery, and that the position was even worse with regard to major discoveries?

The Earl of GOWRIE

My Lords, the wildcats will be let loose in this House in a Question from my noble friend tomorrow, and I shall take up that point directly then, as it would be more appropriate. Nevertheless, I agree with the noble Lord that it is obviously true that some of the best and the most profitable sites were exploited first.

Lord MURRAY of GRAVESEND

My Lords, as we are now facing the fact, if we are to believe the experts, that there will be an almost total dry-up of oil by the year 2000, is there not a case for greater State, rather than private enterprise, intervention?

The Earl of GOWRIE

My Lords, I do not accept the rather bearish expectations of the noble Lord.

The Earl of LAUDERDALE

My Lords, I thank my noble friend further for what he has said. Without wishing to anticipate the letting loose of wildcats tomorrow, will he not agree that much damage has been caused in the industry by the staged approvals programme? Is it not high time that the industry was given clear indications of the terms on which a royalty might be remitted in the case of marginal fields?

The Earl of GOWRIE

My Lords, it is exactly for that reason that we are reviewing the whole programme.