HL Deb 17 December 1980 vol 415 cc1099-100
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 how they expect exploration and appraisal drilling on the United Kingdom continental shelf to develop over the years 1981, 1982 and 1983 respectively compared with the years 1978, 1979 and 1980 respectively.

The Minister of State, Department of Employment (The Earl of Gowrie)

My Lords, it is not the practice of Her Majesty's Government to publish forecasts of exploration and appraisal activity. However, the level is now considerably higher than when this Government took office. Our policy of encouraging private enterprise in the United Kingdom continental shelf, taken together with the increased price of oil, has improved the confidence of companies operating there. The number of exploration and appraisal wells started in the last 12 months is about 25 per cent. up on the previous year, in spite of a worldwide shortage of drilling rigs.

The Earl of Lauderdale

My Lords, in thanking my noble friend for that encouraging reply—which shows a great improvement on recent years under another Government—is he not aware that, in fact, this shows a rig activity which will be more than 50 per cent. up next year on the present year and is likely to be 15 per cent. up the year after? Is he also aware that the Government's unfortunate decision to try to levy another £1,000 million out of a hardworked industry by means of the petroleum-production tax is likely to be a disincentive to development?

The Earl of Gowrie

My Lords, of course I agree with my noble friend that the Government are very conscious of the need to preserve the attractiveness of the continental shelf as an area for new investment. But I would point our to my noble friend that oil companies have benefited from substantial oil price rises in the two-year period. The proposed measures do, in our view, reflect the need to strike a fair balance between the interests of the nation and the companies.

The Earl of Lauderdale

My Lords, will my noble friend assure us that the companies will have a fair chance to state their case to the departments involved and will be listened to sympathetically, because some of them have not, in fact, has the windfall benefits that are attributed to them?

The Earl of Gowrie

My Lords, I am happy to say—and I congratulate them upon this—that oil companies are not by their nature particularly reticent in their representations.

Lord Hawke

My Lords, will Her Majesty's Government join OPEC and, if not, why not?

The Earl of Gowrie

My Lords, I think that that is somewhat wide of the original Question.

The Earl of Lauderdale

My Lords, will my noble friend answer one other supplementary?—namely, whether, in so far as rig activity is greatly increasing, as his answer demonstrates, the Government would not find it opportune now to give some particular encouragement and help to British shipyards to go in for rig construction, seeing that charters are now running for more than three years, starting two or three years ahead from now.

The Earl of Gowrie

My Lords, certainly as an employment Minister I feel a particular frustration at the fact that, during a worldwide shortage of rigs and during a period of very great international demand for rigs, British industry is not reacting quickly enough. It is reacting, but we should all like to see it react much more quickly. I urge all companies who have a capacity to service these needs to get on with it.