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North Sea Oil

Volume 978: debated on Monday 11 February 1980

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asked the Secretary of State for Energy when next he plans to meet representatives of the oil industry to discuss the latest situation in the North Sea.

In view of the Government's success in achieving an increase of almost 50 per cent. in the number of exploration rigs currently operating in the North Sea since February last year, what consideration is my hon. Friend giving to any new means of making marginal fields commercially viable? When does he anticipate announcing proposals to encourage far greater development of those fields.

My hon. Friend will be aware that in the middle of last year, in conjunction with the oil industry, represented by the UK Offshore Operators Association, the Treasury and the Inland Revenue, we set up a committee to examine the position. Its purpose was to present ideason how we might further encourage the development of marginal fields. The committee has not yet reported, but I hope that it will do so before long. However, the increase in world oil prices has meant that some areas that were formerly considered marginal have become reasonably attractive.

:How can the Minister justify the intended build-up of staff in the office of the Department of Energy at Millbank, at the expense of the Offshore Supplies Office in Glasgow? That office is expected to lose 40 per cent. of its staff. As a Scottish Member of Parliament, how can he justify such action?

Not for the first time the hon. Gentleman has got it wrong. The number of staff at the Offshore Supplies Office in Glasgow had increased considerably during the last Administration. At their own suggestion they carried out a rationalisation, which has been highly successful. As a result, the Offshore Supplies Office will be more effective. The increase in staff at Millbank has nothing to do with the Offshore Supplies Office. It is purely a consequence of removing responsibility from the British National Oil corporation as special adviser to the Government. That responsibility is now undertaken by the Department, as it should have been before.

As there is a clear need to encourage further exploration, will my hon. Friend say when we may expect the oil industry to be allowed to explore in the Western areas? Those areas are said to contain significant sedimentary basins in deep water.

:My hon. Friend will appreciate that it would not be right if I were to make a positive announcement now. The seventh round arrangements are now under negotiation, and no doubt he will learn of our proposals in due course.

In the light of the flow of assets in the general economy, is any consideration being given, in discussions with industry and the special committee, to the possibility of using oil in a positive way? Oil is an expensive component of transport. Because of all the ways in which it is used, it may be possible to bring down the cost of living and thereby lessen wage demands.

:Like its predecessors, this Government would dearly like to keep down the price of oil. However, we cannot divorce ourselves from the rest of the world. World oil prices rose by more than 100 per cent. last year. However anxious a Government may be to control prices, it is impossible to do so.