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Gas Production (Shetland)

Volume 455: debated on Thursday 18 January 2007

The lack of gas infrastructure west of Shetland is a key constraint on development. We have established a group from industry and Government to work together on that. In addition, we changed the licensing scheme to encourage development; about 60 blocks have been licensed and activity is under way.

With news this week of further discussions on the decommissioning of the Brent field, it is becoming ever more important that we find new production to keep the North sea industry going. Does the Secretary of State recognise that if fields were brought together with an imaginative solution, that would provide 6 per cent. of the UK’s needs by 2016? Will he emphasise to the Treasury the importance of coming up with a regime that encourages a gas-gathering pipeline to make sure that we unlock that potential, because any gas left in the ground will pay no tax, provide no jobs and not contribute to this country’s energy needs?

The hon. Gentleman is right—it is believed that there is very substantial potential in that regard, if we can commercially extract oil from the west of Shetland. The difficulty is that it is some 600 km away from the nearest pipe that could take that oil ashore, and the other difficultly is that no one single field would be big enough on its own to act as a collecting point for smaller satellite fields. We are discussing with the industry the possibility of pooling resources in order to get a network to bring that oil ashore. The hon. Gentleman is also right in saying that, if we can get to the oil west of Shetland, that will make a very substantial difference by enabling us to get more oil. At this time, especially when North sea oil is in a long but inevitable decline, it would be an extremely useful addition to this country’s oil stocks.