HC Deb 13 November 1980 vol 992 cc334-6W
Mr. Skeet

asked the Secretary of State for Energy whether he has established, or intends to establish, an overall figure for North Sea oil and gas production as a basis for operating a depletion policy.

Mr. Gray

As I said in my statement to the House on 23 July 1980, there are major uncertainties about future levels of North Sea production and consumption and there can be no rigid depletion plan.

Mr. Ernie Ross

asked the Secretary of State for Energy (1) if he will provide a list of any companies that have handed back blocks allocated to them in the sixth round of North Sea licences without completing specified work programmes; whether these companies will be allocated blocks in the imminent seventh round; and if so, what steps he intends to take to ensure that these companies carry out specified work programmes;

(2) if he will provide a list of the names of the companies that handed back blocks rather than complete specified work programmes in the fourth round of North Sea licensing; and how many blocks were involved;

(3) how many blocks were handed back by oil companies which did not complete specified work programmes in each of the first, second, third and fifth rounds.

Mr. Gray

The detailed information requested for the first to fourth rounds of offshore licensing is not readily available and it could be provided only at disproportionate cost. In almost all cases of surrender before work obligations had been completed, the Department satisfied itself that such surrenders were justified on geological grounds; for example, where the results of one or two wells had, in the opinion of the Department, confirmed the licensees' view that the prospect of an economic discovery of hydrocarbons no longer existed. The published criteria against which seventh round applications are being judged include past performance in thoroughly exploring areas held under earlier licences.

Under the fifth and sixth rounds, licences have until 1985 and 1986 respectively, to complete the work obligations specified in their licences. Work obligations are a condition of the licences and failure to complete by the due date constitutes grounds for revocation. This provides a strong incentive for licencees to fulfil their obligations.

Mr. Ernie Ross

asked the Secretary of State for Energy what percentage of North Sea oil accrued by the British National Oil Corporation is currently refined in the United Kingdom before export.

Mr. Gray

I cannot disclose information on the disposal of North Sea crude oil by individual licensees, including BNOC, since it is given to me in confidence.

Mr. Ernie Ross

asked the Secretary of State for Energy what percentage of North Sea oil production was refined in the United Kingdom before export in each year since 1974.

Mr. Gray

The estimated United Kingdom exports of products derived from North Sea crude oil expressed as percentages of North Sea crude oil production are as follows:

Percentage

1974 —, 1975 1.1, 1976 11.4, 1977 9.3, 1978 7.6, 1979 6.8.

Mr. Ernie Ross

asked the Secretary of State for Energy what is the total figure for gas flared off in the North Sea to date; and what percentage of oil and gas production to date this represents.

Mr. Gray

The cumulative total of associated gas from United Kingdom continental shelf (UKCS) oilfields which has been flared, up to the end of September 1980, is 18,609 million cubic metres.

This represents the equivalent of approximately 6 per cent. of cumulative production of UKCS oil and gas from the fields concerned.

Mr. Ernie Ross

asked the Secretary of State for Energy what are the current average values in £ sterling of (a) one barrel of premium North Sea crude oil and (b) the net product which could be refined from such a barrel of oil.

Mr. Gray

The grade of North Sea crude normally quoted for pricing purposes is Forties. The current term price is $36.25 per barrel, which equates to about £15.15 per barrel at the exchange rates for 11 November. The amount of each product produced depends upon the sophistication of the refining process whilst the product values depend upon the markets in which they are sold. Taking these points into account my Department estimate that the market realisations of products from a barrel of Forties would currently lie between about £14.60 and £17.00.