§ Mr. Dempseyasked the Secretary of State for Energy if he will make a statement about exports of North Sea oil.
§ Mr. BennIn his statement of 6th December 1974 my predecessor made it clear that, as well as being used for domestic consumption, some quantities of North Sea oil would be exported and that there were technical reasons which made it sensible for the United Kingdom to continue to import oil even when North2W Sea production exceeded United Kingdom demands.
The first United Kingdom offshore oil was produced last year, and since then over 2 million tons have been produced, mainly from BP's Forties field. So far all of this production has been absorbed within the United Kingdom. BP recently informed the Government that it had in mind the beginning of exports of some North Sea oil, and I should tell the House that the first shipment is to be made tomorrow to Germany. BP has told us that it expects the volume of such exports in the second quarter of this year to amount to roughly 400,000 tons or rather less than one-third of expected Forties production in the period.
The remainder of Forties production will be refined in the United Kingdom. At present prices these exports should benefit the balance of payments by about £20 million.
The Government have a strong continuing and legitimate interest in this matter and the company recognises this, not only because the export of oil represents a milestone in the exploitation of a key national resource, but also on a practical level, because of its possible implications for Government revenues and for the balance of payments.
I have discussed BP's plans with the chairman of the company, Mr. David Steel. He informed me that it is his company's policy to process, within operational and commercial constraints, as much of its North Sea production as possible in its United Kingdom refineries; to explore on a continuing basis the feasibility of disposing of North Sea crude which is surplus to the company's own United Kingdom requirements to other companies seeking oil for refining in the United Kingdom who are prepared to offer terms competitive with those obtainable for exports; and to charge such prices for overseas sales of North Sea crude as fully reflect its value in relation to other similar crudes.
I, for my part, have told him that in the light of this Her Majesty's Government see no reason to express any concern about his company's present proposals as described to my Department.