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North Sea Oil (Refining)

Volume 959: debated on Monday 4 December 1978

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asked the Secretary of State for Energy what is his latest estimate of the proportion of North Sea oil from United Kingdom fields which will be refined in United Kingdom refineries in 1978


During the first nine months of 1978, the most recent period for which data are available, 56 per cent. of oil production from the United Kingdom continental shelf was refined in the United Kingdom. The Department estimates that a similar proportion will be refined here during the remainder of 1978.

In view of the under-utilisation of United Kingdom oil refineries, what action will my right hon. Friend take to improve that figure even more? Will he assure us that he will resist any EEC interference with this country's right to insist on the landing of North Sea oil in Britain?

The answer to the second part of the question is"Yes ", but I think my hon. Friend would be the first to concede that the so-called two-thirds rule is best expressed in the words of the then Secretary of State for Energy in 1974 that

" we might reasonably expect up to two-thirds of North Sea oil to be refined in the United Kingdom."—[Official Report, 6th December 1974: Vol. 882, c. 647.]
We must make sure that the disposal plans, the refinery plans, and so on, are in the national interest. It is not always the case that actually refining the oil here is necessarily in the national interest. However, we are conscious of my hon. Friend's problem over the refinery on the Isle of Grain, and have expressed strict views to the chairman of BP that we expect to be consulted before any major decisions are taken about the refinery position.

Does the two-thirds rule apply to BNOC and also to Deminex, the Germany company, or will they be exempted?

We cannot give figures for individual companies or for BNOC, because that would be a breach of commercial confidentiality, but the rule applies across the board.