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Oil Licences (Government Participation)

Volume 889: debated on Monday 7 April 1975

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asked the Secretary of State for Energy if he will make a statement on the Government's discussions with the oil industry on the subject of Government participation in existing oil licences.

Negotiations are continuing on the basis outlined in the answer given by my right hon. Friend the Chancellor of the Duchy of Lancaster to the hon. Member for Bolsover (Mr. Skinner) on 19th February.—[Vol. 886, c. 1338.]

Is the Secretary of State aware that of the 13 billion barrels of oil reserves in Prudhoe Bay in Alaska half is owned by BP/Sohio and that of a similar quantity in the North Sea half is owned by the American oil companies? Is he not suggesting to the American oil companies that they should take a 51 per cent. interest in the reserves in Prudhoe Bay, and would not that be to the detriment of the people of the United Kingdom?

Our research plans in the North Sea in no way affect BP's interest in Alaska.

In view of the evidence published yesterday in theSunday Timesfrom the Wood Mackenzie survey showing the Government's very low taxation take from North Sea oil, will the right hon. Gentleman promise that the Government will not sell the pass in the negotiations on participation as they have done on the question of taxation?

I do not accept what the hon. Gentleman has said about the petroleum revenue tax. Our negotiations with the oil companies to achieve majority participation in existing licences will be voluntary. It may well be that they will vary from one licensee to another, but we shall achieve a fair deal for the British people.

Has not the right hon. Gentleman entirely missed the point of the question of my hon. Friend the Member for Bedford (Mr. Skeet)? Does he not recognise that if the Government break contracts by retrospectively changing the conditions of the licences there is a danger to British investments overseas at the hands of foreign Governments and that BP's investment in Alaska is an obvious target for an American Government seeking to retaliate?

There is not a shred of evidence to suggest that what we are proposing to do in relation to our oil resources in the North Sea affects what BP is doing in Alaska. I can give the right hon. Gentleman and the House that categorical assurance.