My Department's report to Parliament of April this year on the "Development of the Oil and Gas Resources of the United Kingdom"—the Brown Book—gives our latest estimates of reserves. They show that additions to reserves during last year kept pace with production during the year in the case of oil, and exceeded production in the case of gas.
I am grateful to my hon. Friend for that reply. Does he agree that those healthy estimates confound the moaning minnies and pessimists who constantly claim that our reserves are running out? Does he further agree that those figures will have a healthy influence on the British economy in the next few years?
I agree with my hon. Friend. Nearly half the oil so far discovered on the United Kingdom continental shelf and almost two thirds of the gas remain to be produced. We look set, therefore, to remain self-sufficient in oil well into the decade and a significant producer into the next century.
Will the Minister confirm that in recent years we have been able to extract oil from below the North sea because of the different incentives introduced by the Government, through Acts of Parliament, to enable the smaller pools of oil to be used? Does he agree that if it is possible to use incentives to extract oil in that way, it is sensible to do the same for coal that is located in thinner seams? The Government should not have double standards.
There are no double standards. Substantial support has been given to coal—far more than has been devoted to the development of oil and gas. The success of oil and gas production in the United Kingdom has been due primarily to the stable fiscal and regulatory regime under which international operators have worked.
The information that my hon. Friend has given about gas supplies is encouraging, but is he aware that a substantial minority of people in this country do not have a gas supply? Will he talk to those who now run the gas industry and tell them that anyone living in a reasonably built-up area should have the right to the provision of a gas supply?
When considering licence applications from offshore oil and gas companies wishing to extract those most welcome oil and gas reserves, what emphasis is placed on the safety needs of those employed in extracting those reserves? Does the Minister agree that a modern, up-to-date standby vessel fleet is essential for the safety of those workers and will he therefore impress upon the oil and gas companies the manifest need to replace the aging vessels in the fleet with modern purpose-built vessels? That is what is needed by those employed in the offshore oil and gas industry.
The hon. Gentleman makes an important point. However, I draw to his attention that important safety considerations are examined at the annex B or production licence stage and not at the initial licence award round. A company that wins an award for prospectivity must prove that it achieves very high levels of safety, not least those outlined in the Cullen report. The main thrust of the important point that the hon. Gentleman makes, and with which I agree, is dealt with at the production licence stage later.
First I welcome the initial statement made by the Minister. Opposition Members share his optimism for the North sea. Is he aware that production will continue to demand the highest possible level of encouragement from the Government? Does he share my anxiety that the Geological Society, which has been engaged in mapping the seabed in the most prospective areas, is to have its contract with the Department of Energy terminated in the next two years, even though it is about to embark on surveying areas in the north-west of Scotland where we have high hopes for further reserves of hydrocarbons?
I can assure the hon. Gentleman that that particular work, which was commissioned a while ago, will complete its normal course in two years when full assessment will have been completed to a depth of 600 ft. If my memory serves me right, arguments to go down to 6,000 ft—which is what we are talking about in the north-west frontier acreage—is totally unreasonable and unnecessary. Of course, we shall review carefully arrangements with outstanding organisations such as the one that the hon. Gentleman mentioned. However, I emphasise that we are not curtailing a report. It will come to its full and complete conclusion in two years.