§ Mr. Kilroy-Silkasked the Secretary of State for Energy if he will make a statement on progress towards 51 per cent. Government participation in North Sea oil.
§ Mr. John SmithProgress continues towards the first full agreements with those who have accepted the principle of majority State participation; and useful discussions are also being held with a number of other companies.
§ Mr. Kilroy-Silkasked the Secretary of State for Energy if it is still Government policy to obtain a 51 per cent. State stake of the equity of the oil companies operating in the North Sea.
§ Mr. John SmithIt remains the firm aim of the Government to secure majority 317W State participation in commercial oilfields under development now or found under fifth round licences, but this will not normally involve purchase of a stake in the equity of oil companies.
§ Mr. Kilroy-Silkasked the Secretary of State for Energy what assurances he has given the oil companies operating in the North Sea about their expected profits; and how these would be affected by the Government taking a 51 per cent. stake in the industry.
§ Mr. John SmithIn the White Paper "United Kingdom Offshore Oil and Gas Policy" (Cmnd. 5696) the Government recognised that the oil companies require a suitable return on their capital investment and this principle is reflected in the subsequent Oil Taxation Act. Majority State participation in commercial fields under existing licences—which does not normally involve acquisition of a stake in the equity of companies—is not designed to increase Government revenue: companies have been assured that participation agreements will leave them financially neither worse nor better off. Methods of achieving this objective are currently under discussion with the companies.