Production Licences for Seaward Areas

Orders of the Day — Petroleum and Submarine Pipe-Lines Bill – in the House of Commons at 12:00 am on 5th November 1975.

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Lords Amendment: No. 31, in page 56, line 29, at end insert: and where it is determined in consequence of any reference to arbitration in pursuance of sub-paragraph (a) of this paragraph that the programme in question does not satisfy the relevant requirements the Licensee shall submit to the Minister, as soon as possible after the date of the determination, a further programme which satisfies the relevant requirements.

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I beg to move, That this House doth agree with the Lords in the said amendment.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

I understand that it will be convenient to discuss at the same time Lords Amendments Nos. 40, 48 and 56.

Photo of Mr John Smith Mr John Smith , Lanarkshire North

These are drafting amendments, which provide that where a dispute about an additional exploration programme has been submitted to arbitration and the arbitrator decides that the programme does not measure up to what is required, the applicant shall submit a programme which does measure up. It removes any possible doubt.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Lords Amendment: No. 34, in page 61, line 10, after "programme" insert and the quantity so specified in such further notice shall not be less than four-fifths of the proven production capacity of the field for the period specified in that further notice;

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I beg to move, That this House doth disagree with the Lords in the said amendment.

It may be more convenient for the Opposition to make their comments on the amendment and then for me to reply at the end.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

With this amendment we may also discuss Lords Amendments Nos. 43, 51 and 59.

Photo of Mr John Moore Mr John Moore , Croydon Central

Though I sense the desire of the House to get into headlights, there are one or two points with which I must detain hon. Members. Basically, in the clause concerned with production control, the Government created a four-fifths' depletion pattern, and we cannot disagree with that. We recognise the need for depletion controls. We note the need for high levels of output in cases of emergency, but we are not quite so sure that the Government and perhaps some Opposition Members have taken full account of the needs of conservation in depletion on the lower side. There were two major flaws in the original clause, but these have basically been taken care of. We have considered the considerable financial uncertainty which would be created for licensees and their bankers, and the technical uncertainties arising from the percentage of possible depletion that the Government might make in a change notice. The changes were made to the Bill in Committee, and the clause was improved considerably. The upper and lower limits were established in the depletion notice procedure.

In the face of the considerable uncertainty created in the last 18 months it is reasonable for us to ask for a greater degree of certainty for the industry, especially in the light of the assurances given by the previous Secretary of State on 6th December 1974, when he sought to confirm the figure of 20 per cent. for depletion. We are seeking to isolate even more precisely, if possible, the possibilities of a four-fifths' pattern of depletion.

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I am grateful to the hon. Member for Croydon, Central (Mr. Moore) for recognising the way in which the Government have sought to meet realistic points raised by both the Opposition and the industry. In this amendment the hon. Member is seeking to put the policy statement into legislative form. We think that it would be far better if the Government were free to make policy statements as and when required. We stand by the policy statement of 6th December last. There are great limitations to putting this sort of thing into legislation, because it would leave the Government with much less flexibility. In the present circumstances, I hope that the House will agree that the amendment is unsuitable.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Lords Amendment: No. 39, in page 66, line 32, at end insert and an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, it shall be exchanged for other petroleum.

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I beg to move, That this House doth agree with the Lords in the said amendment.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

With this we may take Lords Amendments Nos. 47 to 55 and No. 63.

Photo of Mr John Smith Mr John Smith , Lanarkshire North

This amendment is not only fairly formal but meets with general agreement.

Question put and agreed to.

Lords Amendment: No. 40, in page 79, line 17, at end insert and where it is determined in consequence of any reference to arbitration in pursuance of subparagraph (a) of this paragraph that the programme in question does not satisfy the relevant requirements the Licensee shall submit to the Minister, as soon as possible after the date of the determination, a further programme which satisfies the relevant requirements.

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I beg to move. That this House doth agree with the Lords in the said amendment.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

With this we may take Lords Amendments Nos. 41 and 42, which have already been discussed.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

I suggest that the rest of the amendments are put formally, because they repeat in substantial part the schedule amendments which we have already taken. It would be convenient for the House to deal with them together.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

I cannot do that, but we can take Nos. 41 and 42 together.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Lords Amendment: No. 43, in page 83, line 11, after "programme" insert and the quantity so specified in such a further notice shall not be less than four-fifths of the proven production capacity of the field for the period specified in that further notice;

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I beg to move, That this House doth disagree with the Lords in the said amendment.

Question put and agreed to.

Subsequent Lords amendments agreed to.