Oil profits will swamp debt, says Minister

Press, 9 December 1976, Page 8

Oil profits will swamp debt, says Minister

NZPA-Reuter Birmingham Profits from oil and gas extracted from Britain’s offshore fields will coxcr the nation’s overseas debt man) times over, the British Minister for Energy (Mr Dickson Mabon) has said.

Dr Mabon told oil-industry leaders at the opening of an exhibition of offshore equipment in Birmingham that it was not true that the North Sea fields w’ere already mortgaged up to the hilt, as some i reports had suggested. He said that by 1980. assuming that oil prices were maintained, offshore oil could improve Britain’s balance of payments by more than 3 per cent of its Gross National Product — three billion pounds a year that would become available as most of the nation’s medium-term debts became due for repayment.

Current estimates put the recoverable oil off Britain at between three billion and 4.5 billion tonnes, worth at today’s prices about £2OO billion — roughly 20 times Britain’s present overseas debts.

Including profit from gas and other oil reserves as yet undiscovered, the total value might be as high as £3OO billion. The Minister admitted that the North Sea was a tough and expensive place to work, bu; stressed that at most extraction costs were half the oil value, and at best as little as a seventh. He said oil had begun to flow from the seventh North Sea field, the Piper, which is expected eventually to yield 240.000 barrels a day. Throughout Britain, a balki began yesterday that will decide whether coalminers will give their national executive the power to take industrial action in support of a claim for earlier retirement. Pessimistic observers fear that the vote will mark the beginning of the end for the “Social Contract,” the unwritten agreement between the Labour Government and the trade unions that has held out for two tense years, during which unions have restrained their wage demands and co-operated with the Government in its attempts to face the nation’s economic woes.

Now, from the unhealthy.! dust-ridden coalmines hasi

icome a rising demand for earlier retirement that the State-run Coal Board sa\s pay restraints. The miners have said they do not want to bring the Government down, but thev are determined to gain earl» ier retirement — at age 60 by January, next year, and at age 55 by June, 1980. The Coal Board has offered a compromise of a gradual reduction of the retiring age to 62 for those who have worked in the mines for more than 25 years. The miners rejected this.

The ballot result is ex pected on Tuesday.

In London, the Chancellor of the Exchequer (Mr Denis Healey) has told a luncheon of the Foreign Press Association that he hoped agreement in principle was imminent on international backing for sterling, and in so doing contributed to a gain by the pound of more than a cent on the foreign exchange markets.

The Chancellor spoke after attending the latest in a series of Cabinet meetings about the extent of the economic sacrifices Britain will have to make to qualify for the 3.9 billion dollar stand-by credit it is seeking from the International Monetary Fund. Foreign governments and private residents abroad hold about six billion pounds, and these balances have become a permanent threat to the pound’s stability because many holders can sell out when they choose. The tension of the last few months showed again in the House of Commons on Tuesday when a Labour member of Parliament, Mr Tom Swain, once a fairground boxer, shouted at a Conservative, Mr Norman Tebbit, “Say that outside the House, and I’ll punch your bloody head in.”

Whatever Mr lebbit had said, he is not yet reported to have repeated it outside the house.