Oral Answers to Questions — Offshore Oil (Development)

– in the House of Commons at 12:00 am on 3rd May 1976.

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Photo of Mr Nigel Forman Mr Nigel Forman , Sutton Carshalton 12:00 am, 3rd May 1976

asked the Secretary of State for Energy what methods of finance his Department proposes to encourage in order to develop discoveries of offshore oil up to 1980.

Photo of Mr Gordon Oakes Mr Gordon Oakes , Widnes

My Department recognises the importance of financing considerations. It is not for me to encourage any particular method of raising finance for Continental Shelf development. The Department will take what action it properly can to facilitate the provision of finance, as the recent Claymore and Tricentrol transactions show.

Photo of Mr Nigel Forman Mr Nigel Forman , Sutton Carshalton

As between £8 billion and £10 billion will probably be needed to finance development up to 1980, will the hon. Gentleman give an undertaking that his Department will do everything possible to encourage private financing as well as other forms of financing in the North Sea? Further, will he look favourably on such imaginative developments as the idea of syndicates of insurance companies and pension funds to provide finance for offshore oil?

Photo of Mr Gordon Oakes Mr Gordon Oakes , Widnes

Yes. My Department keeps in close touch with the financial community in order to play a constructive rôle in transactions where consent is needed and to ensure that Government policy is not misunderstood. The hon. Gentleman will be aware of considerable funding of finance coming from United States bankers to help oil companies at present.

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

As the Government now have a borrowing requirement in excess of £12,000 million, will the Minister give an assurance that he will not encourage the BNOC to commit public funds in any future financing and that he will give every incentive to the private sector?

Photo of Mr Gordon Oakes Mr Gordon Oakes , Widnes

I shall most certainly not give that assurance to the House. The BNOC has an important rôle to play. Indeed, it is empowered to give loans and guarantees, subject to Government consent. Occasions could arise when the BNOC could fruitfully make use of its powers and considerably assist the development of British oilfields.

Photo of Peter Viggers Peter Viggers , Gosport

Will future participation agreements follow the pattern of the Gulf-Conoco agreement?

Photo of Mr Gordon Oakes Mr Gordon Oakes , Widnes

The House must await a statement on that matter.