New licence to print black money

THE TORY government is now in the process of giving away over 400 oil and gas concessions in the North Sea which will net their owners thousands of millions of pounds. In fact, the whole scheme is another licence to print money.

The revenue from the fields already discovered on the British continental shelf will be seers for metere dis over prospects future coveries are excellent and the price of oil is in a marked uptrend, the total revenue could reach £50,000m or more.

Even after deduction of exploration and development expenses, the profits will be immense for the companies with the concessions.

The recovery of significant volumes of natural gas from a well off the Irish coast, together with the results of recent seismic surveys in the western approaches and near Rockall Bank, also make bright prospects for additional discoveries.

Licences for exploring these fields will be given away free of charge, except for a small application tee which, compared to the potential revenues, is insignificant.

The value of British offshore licences is high. The August 1970 issue World Petroleum' quoted an estimate that just six of the 94 British blocks awarded in 1970 were worth £44m.

These six blocks were granted for an application fee of less than £50,000.

Oil and gas resources are vested in the state and administered by the Department of Trade and Industry under John Davies. In June 1971 the DTI offered 15 blocks, each about 100 square miles in area, for competitive bids. These attracted total bids of £135m from 73 companies and 31 groups.

They were eventually the highest bidders for £37.3m. One block was sold for £2Im. big pressure from the oil lobby following these deals. For the government promptly offered no less than 421 free blocks and, not surprisingly, has received requests for 271 of these!

The prospects under these blocks are considered excellent and, because of the large number of companies wishing to share in the bonanza, the 26 most favoured blocks have each been requested by from 15 to 28 companies or groups.

In practice, the final awards will have to be made on an arbitrary. basis, with those favoured in the eyes of the DTI obviously coming out on top. Who knows what sort of manoeuvres are now taking place in the corridors of power!

Whichever way you look at it, the oil and gas exploration companies have got it made. For example, British law requires the surrender of 50 per cent of the licence area after six years, but the retained area can be selected in a block so large that it covers the entire productive part of a licence.

It has been estimated that oil companies operating around British coasts can expect to make a net profit per barrel three times larger than they would elsewhere.

All inquiries about rumours of licences to print money should be addressed to John Davies, the Department Trade and Industry, London.