§ Mr. Campbellasked the Secretary of State for Energy what progress has been made in participation negotiations with the Union Group.
§ Dr. J. Dickson MabonOn 29th November 1976 the Government and the British National Oil Corporation concluded heads of agreement on the basic terms for participation by BNOC with members of the Union North Sea Group in respect of their interest in the licence covering Block 2/5 in which the Heather Field is situated. It is intended that a fully-termed definitive agreement should be signed within 120 days.
The Union North Sea Group consists of Unionoil (31.25 per cent.), Skelly Oil (31.25 per cent.), Tenneco (31.25 per cent.) and Norwegian Oil Company D.N.O. (6.25 per cent.).
Under the agreement, BNOC will have an option to purchase, at market prices up to 51 per cent. of all petroleum won 121W and saved from all commercial developments in Block 2/5. BNOC's purchase option will become effective in about 1980, with a nine months notice period.
The agreement also provides for BNOC to become a party to the Block 2/5 licence and associated operating agreements and to have an effective voice in their operations.
The terms of the arrangement fully satisfy the Government policy to achieve majority State participation in Block 2/5 while leaving the companies financially neither better nor worse off.