HC Deb 23 July 1980 vol 989 cc226-7W
Mr. Waldegrave

asked the Secretary of State for Energy if he will now make a statement on the Government oil depletion policy.

Mr. David Howell

We expect that from later this year United Kingdom oil production will regularly reach a level equal to United Kingdom consumption. Thereafter, on present forecasts production would rise to a peak in the mid-1980s giving a significant surplus over United Kingdom consumption in the 1980s as a whole. We are likely to become net importers of oil again about 1990.

Recent events underline the fragilities of the world energy scene. The Government believe that on strategic and security of supply grounds it is in the national interests to prolong high levels of UKCS production to the end of the century. This requires action to increase exploration which we have already taken, and to defer some oil production from the 1980's. Such action accords fully with the recommendations to maximise indigenous hydrocarbon production on a long term basis and with our other international commitments including net exports of 5 million tonnes in 1985 as agreed in the Community and the International Energy Agency.

There are of course, major uncertainties about future levels of North Sea production and United Kingdom consumption. There can therefore be no rigid plan. We shall continue close supervision over reservoir performance at existing fields and scrutinise new applications for field developments to ensure good oil field practice consistent with optimum oil and gas recovery in the national interest. We shall also continue to take decisions on case-by-case basis, but giving greater emphasis to the need to limit the sharpness of the peak in production. We shall of course, honour the assurances given by the right hon. Member for Chesterfield (Mr. Varley) on 6 December 1974 on the basis of which heavy investment has been undertaken by the oil companies.

In particular, the Government will consider delaying the development of fields discovered after the end of 1975, which are not covered by the assurances given by the right hon. Member for Chesterfield. The Government will also continue to tighten control on gas flaring.

The Government have taken no decisions on whether to have production cutbacks which, under the assurances given by the previous Administration, cannot be made before 1982.

I believe that this flexible approach is the right one and takes account of both the needs of those involved in the difficult business of oil production and, more important, the long-term national interest.

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