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North Sea Gas And Oil (Production Costs)

Volume 892: debated on Monday 12 May 1975

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13.

asked the Secretary of State for Energy what is his present estimate of the total capital cost of bringing the North Sea gas and oilfields into full production; and how much of this sum will be provided by the BNOC.

21.

asked the Secretary of State for Energy what is his estimate of the cost of the development of current proven reserves in the North Sea.

Present estimates of the likely capital cost of developing the proven reserves of North Sea oil and gas, excluding the gasfields already in production, lie within the range £6,000 million to £7,000 million in today's money. The share of the investment to be borne by BNOC will depend on the outcome of the present participation negotiations.

Will the Secretary of State tell the House how that figure of £6,000 million to £7,000 million squares with the fact that the total sum of money available to the BNOC under the forthcoming Bill is only £900 million? Further, is it part of BNOC's borrowing plan that the North Sea oil revenues should be kept in a separate account at the insistence of BNOC's creditors who will be looking to those sums as their collateral and do not wish to see them disappearing in the overall massive public deficit?

I refer the hon. Gentleman to the fact that one section of the Bill sets up the National Oil Account, which will move into surplus in a few years.

Regarding these massive oil reserves, if the people of this country mistakenly vote to stay inside the Common Market on 5th June, shall we then sell oil to Common Market countries—Western Germany, France and others which have no vast reserves—at the same price as we sell it to ourselves through out own system?

It would have to be sold at a common price if that were the case I think that that question has been answered previously.

My hon. Friend the Member for Mid-Sussex (Mr. Renton) has raised a very important point. If the royalties and BNOC's share of the tax are to be siphoned off into the oil account, will that be in order that it should be spent by the BNOC or to protect it for the benefit of our creditors overseas?

The question of the cost of participation—that was the real question asked by the hon. Member for Mid-Sussex (Mr. Renton)—will depend on the negotiations and how far we are able to get on participation this year. The royalties and payments for participation will be paid into the National Oil Account, and that account can be used, if circumstances require, to pay for participation.

On a point of order, Mr. Speaker. In view of the very unsatisfactory nature of the answer to my Question, I shall seek to raise the matter on the Adjournment.