§ Mr. Skeetasked the Secretary of State for Energy (1) when he proposes to grant licences under SI 1976/276 to the British National Oil Corporation and the British Gas Corporation;
(2) what was the purpose of revising the Petroleum (Production) Regulations 1966/898;
(3) whether he intends to give parity of treatment to private and State companies in view of the Petroleum (Production) (Amendment) Regulations 1976/276;
(4) if it is Government policy that the BNOC should operate commercially in the light of SI 1976/276.
§ Mr. John SmithThe intention to table amending Regulations was announced in a Written Answer to my hon. Friend the Member for Dundee. West (Mr. Peter Doig) on 4th February—[Vol. 904, c. 616–18].
The primary purpose of the Regulation is to clear up possible doubts about the procedure by which licence No. P247 was issued, by providing that offshore production licences can be applied for without prior public invitation of applications in defined circumstances. One of the qualifying circumstances is where a substitute 588W licence is needed by an existing licence holder, e.g. for reasons connected with the financing of oilfield development.
The Regulation also enables BNOC or BGC to make applications for offshore production licences without prior public invitation. This provision is essential to give flexibility to the development of BNOC as a State Oil Corporation. It would for example allow the BNOC to explore blocks without necessarily developing what it finds if at any time the Government wants that. As a State Corporation acting as a sole licensee in the national interest, the BNOC could not very well be expected to operate on precisely the same basis as when it is in partnership or in competition with commercial companies. I made that clear in the debates last year on the Petroleum and Submarine Pipe-lines Bill.
The granting of licences remains at my right hon. Friend's discretion, and he has no plans at present to award new licences to BNOC. The British Gas Corporation has made an application for a licence covering blocks 110/3 and 110/8 in the Irish Sea. My right hon. Friend is giving it consideration and will make a further statement to the House in due course.