HL Deb 18 December 1989 vol 514 cc3-4

2.41 p.m.

The Viscount of Oxfuird asked Her Majesty's Government:

How capital investment in the North Sea oil industry in the first half of 1989 compares with that in the first half of 1988.

Viscount Ullswater

My Lords, capital investment in the North Sea oil and gas industry in the first half of 1989 was 19 per cent. higher at £1.2 billion than in the first half of 1988.

The Viscount of Oxfuird

My Lords, I thank my noble friend for that Answer. Can he give an indication of what further investment is anticipated for 1990?

Viscount Ullswater

My Lords, increased investment in 1989 is good news for the health and future prospects of the North Sea and for the supply industry. Estimates from the National Economic Development Office indicate that investment will reach £3.7 billion in 1990, which is an increase of 75 per cent. compared with the £2.1 billion in 1988.

Lord Peston

My Lords, can the noble Viscount place the answer in a slightly longer term perspective? It is good to see that North Sea oil investment has recovered after the accidents and crises that hit the North Sea, but how does the present position compare with the general investment we experienced in this area over the past decade? Does he believe that investment is buoyant enough in terms of exploiting the future potential of the North Sea oil fields?

Viscount Ullswater

My Lords, I have figures for 1985 onwards. Investment in that year was £2.8 billion; in 1986 it was £2.6 billion; in 1987 it was £2 billion; and the 1988 figure which I have already given to the House was £2.1 billion. Investment in the first half of 1989 at £1.2 billion shows a genuine increase. The oil industry has responded well to the challenge of developing fields in an era of lower oil prices.

Lord Harmar-Nicholls

My Lords, my noble friend gives good figures in terms of the amount invested. However, is he satisfied that the facilities and the expertise are available to exploit it to the full? I ask that because there has been some suggestion that the availability of the necessary expertise has been disbanded and spread out and therefore will not be available to enable full use to be made of the investment about which he has told us.

Viscount Ullswater

My Lords, I believe that most of the investment which I have outlined is supplied by United Kingdom companies and that the percentage is around 80 per cent. I think I can say that Britain has now taken the lead in off-shore oil and gas technology, notably in subsea techniques, floating production systems and slimline fixed structures.

The Viscount of Oxfuird

My Lords, can my noble friend give the House some indication as regards employment within the oil industry at present?

Viscount Ullswater

My Lords, the total workforce employed on off-shore UK oil and gas installations is estimated at around 30,000. In relation to Scotland, a training agency estimated in June 1989 that 60,000 persons were involved in companies the total output of which was dedicated to the oil industry. Moreover, the numbers would be much larger if other firms supplying only a proportion of their output were included.