§ 2.58 p.m.
§ Lord Campbell of Croy asked Her Majesty's Government:
§ Whether they are assisting the Administration of the Falkland Islands to benefit from plans to explore for oil and gas in the adjoining seas and from the production of any hydrocarbons that may result.
§ Baroness Chalker of WallaseyMy Lords, we are in close contact with the Falkland Islands Government to provide advice on legislating for and running an exploration regime for hydrocarbons so that the Falkland Islands Government can benefit from any exploration and subsequent production while ensuring that the area remains attractive to potential investors.
Lord Campbell of CroyMy Lords, I am grateful to my noble friend for that reassuring and welcome reply. As there may be valuable reserves of oil and gas, although in deep water requiring expensive exploration, does she agree that the Falkland Islands and neighbouring countries could benefit if the necessary arrangements could be agreed with sensitivity?
§ Baroness Chalker of WallaseyMy Lords, I can assure my noble friend that arrangements will be made with sensitivity. If oil is found in that area it should be of considerable benefit not just to the Falkland Islands but to their neighbours. I take the point that my noble friend makes.
§ Baroness BlackstoneMy Lords, does the Minister agree with British Gas that exploration in the South Atlantic cannot begin until a political settlement between Britain and Argentina has been agreed? If she does agree, can she tell the House what progress has been made in reaching a settlement? If she does not agree, does that mean that exploration licences will be granted without Argentine involvement or consent; and can she say when they will be granted?
§ Baroness Chalker of WallaseyMy Lords, let us start at the beginning. First, I do not think that the noble Baroness is quite right. I certainly do not agree with what she quoted British Gas as having said. Secondly, while we are seeking to reach agreement with Argentina on commercial co-operation, it will be up to the islanders—and only the islanders—to agree the manner in which the oil industry will develop. There is no need for agreement with anyone else. The other point that must be considered is that we are quite sure that there is the absolute right to administer the Falkland Islands in accordance with international law, which means that the Falkland Islands can decide upon this matter.
§ Lord GisboroughMy Lords, in view of the huge potential income relative to the number of people in the Falkland Islands, can my noble friend say whether Britain will benefit on a licensing basis in any way?
§ Baroness Chalker of WallaseyMy Lords, we are not yet in a position to answer that question finally. I do not know what the revenues might be or how they would 1115 be distributed. All I can tell my noble friend is that Falkland Islands councillors have made it clear that they expect the Falkland Islands Government and Her Majesty's Government to benefit from any oil reserves.
§ Viscount Montgomery of AlameinMy Lords, in the light of the ever-increasing and improved trade relations with Argentina and investment, does my noble friend agree that it is important that we avoid any unilateral statements and that all matters concerning the South Atlantic should be agreed between ourselves, Argentina and the Falkland Islands Government?
§ Baroness Chalker of WallaseyMy Lords, in this matter it is the Falkland Islands Government who are the deciding government. We now have a regular exchange with the Argentine Government on a wide range of issues. I believe that they share our desire to maintain the improvement in our bilateral relationships, and we work away at that. But there is no way in which Argentina can decide the future of the Falkland Islands. Only the Falkland Islanders can do that.
§ Baroness BlackstoneMy Lords, is the Minister telling the House that the Falkland Islands, as a dependent territory of the UK, will go ahead and issue licences for exploration in the South Atlantic without the agreement of the UK Government? If the UK Government's agreement is involved, can she tell us what the Government's current position is on this, as I do not think she entirely answered my original question?
§ Baroness Chalker of WallaseyMy Lords, I apologise to the noble Baroness. She asked me a number of questions and sometimes it is not always as straightforward as the questionner may think to sort out the detail for the answer. There is no way in which the Falkland Islands is likely to go ahead without consulting the British Government, but it is the Falkland Islands which has to act and administer any matter like this in accordance with international law. So consultation, yes. But this is something which is quite a long way off, I suspect, at the moment.
Lord Campbell of CroyMy Lords, can the United Kingdom's experience of nearly 30 years in the offshore industry be made available in what could prove to be a significant new province of undersea hydrocarbons?
§ Baroness Chalker of WallaseyMy Lords, my noble friend is absolutely right. British companies, particularly those which have such experience in the North Sea and in other offshore areas, should be able to give very valuable advice and I hope have the opportunity to participate in and benefit from exploration in the Falklands area.
§ Lord IronsideMy Lords, can my noble friend say whether any exploration licences have yet been granted? There have been rumours that some have been authorised. If so, have any been given to organisations which are connected in any way with the Argentine?
§ Baroness Chalker of WallaseyMy Lords, I am certain that the answer to the second question is definitely no and that no licences have been given. I know that the DTI has offered advice on the preparation 1116 for and the running of the licensing round. But there has been no progress of the kind mentioned by my noble friend.
§ Lord Thomson of MonifiethMy Lords, the noble Baroness talked about consultation between Her Majesty's Government and the Administration in the Falkland Islands. Can she clarify the matter with regard to the question asked by the noble Baroness, Lady Blackstone? Is the Falkland Islands still a dependent territory of the United Kingdom?
§ Baroness Chalker of WallaseyIt is, my Lords, but the consultation I was discussing was what I went on to say in answer to my noble friend just now. Not only has the DTI offered advice on the preparation for and the running of the licensing round, but the Treasury and the Inland Revenue have given advice on the formulation of the fiscal regime, the Health and Safety Executive has been approached to assist in the implementation of health and safety measures, the Foreign Office has provided financial assistance for the baseline nature surveys and we have given legal advice to the Falkland Islands Attorney-General. That is a fair old degree of co-operation and consultation at this stage.