§ Mr. Craigen
asked the Secretary of State for Energy whether he has any further statement to make on the Government's offer to purchase the North Sea assets of the Burmah Oil Company.
§ Mr. Benn
, pursuant to his reply [Official Report, 18th December 1975; Vol. 902, c. 774], gave the following information:
On 3rd December last in announcing the Government's readiness to see the Bank of England extend its guarantee to banks in respect of the Burmah Oil Company's dollar borrowings, I also referred to the North Sea. The Government expressed their willingness to negotiate to purchase the whole or a part 217W of Burmah's North Sea assets. Negotiations were opened shortly thereafter.
I am now able to inform the House of two major developments. First, the Government have reached agreement in principle with Burmah for the purchase by the BNOC of the company's interest in the Ninian Field. The purchase, which is based on a value at 1st January 1976, is subject to finalisation of the contract, which will define inter alia precise liability for expenditures. The purchase consideration is about £83 million for a presently estimated 21 per cent. interest in the field. Should that interest increase or decrease as a result of reunitisation between the two blocks 3/3 and 3/8 comprising the field as a result of a change in the estimate of reserves and/or their producibility in block 3/3, adjustments will accordingly be made at specified times to the price.
In addition, Burmah will receive a proportion of any net receipts which may accrue from the use of the pipeline and terminal system for non-Ninian oil. This agreement for the purchase of Burmah's share in Ninian oil will of course subsume the advance of £40 million made on 5th January 1976 by the BNOC.
Second, agreement has also been reached in principle with Burmah for the purchase, on terms to be negotiated, by the BNOC of a majority interest in a joint exploration and development company with Burmah. A major asset of the joint company will be a substantial beneficial interest in the Thistle Field for which Burmah Oil Development Limited is the operator. The negotiations in this case are at a much earlier stage, and the expenditure may, therefore, fall in 1976–77 rather than 1975–76. As in the case of the Ninian purchase, negotiation will be on an arm's-length basis.
The Government, Burmah and BNOC have thought it right to announce this agreement in principle immediately. BODL is a company with an ongoing capability for exploration and development, and has a team of experienced and able people with the required skills. All parties are determined that that team and all those associated with it shall see an ongoing rôle of future opportunities for exploration and development on the Continental Shelf, which will be ensured 218W by a partnership between BNOC and Burmah.
For the BNOC, these developments increase its already substantial interests in North Sea fields, taking it into Ninian and increasing its stake in Thistle. For Burmah, they provide a continuing rôle and opportunity for the company on the Continental Shelf. For Britain, these developments ensure the retention of part of the national capability for development of our own offshore resources: they represent an increase in the public's control over its own oil; most important, they hold a promise of future national ability to pursue opportunities all around our Continental Shelf.