§ Mr. Craigen
asked the Secretary of State for Energy whether he has any further statement to make on the Government's offer to purchase the North Sea assets of the Burmah Oil Company.
§ Mr. Benn,
pursuant to his replies [Official Report, 18th December 1975, Vol. 902, c. 774; and 10th March 1976, Vol. 907, 216–8], gave the following further information:
Agreement has been reached with Burmah, the effect of which is that BNOC will purchase 65 per cent. of Burmah's interest in the Thistle field and two adjacent areas through the medium of a subsidiary company and a 95 per cent. interest in Burmah Oil Development Limited ("BODL") the company which is the operator of Thistle field. BODL will continue its present operatorships, including that for the Thistle field with its existing staff.
The consideration payable for the purchase will be about £87 million. An advance payment of £25 million is being made by BNOC today, and the balance will be paid, subject to any necessary retentions, as the documentation is completed over the next few weeks.
In announcing in December 1975 the Government's decision to negotiate with Burmah for the purchase of all or part of its North Sea assets, I made clear the Government's intention to negotiate a fair arm's length price. I have throughout the negotiations had the benefit of the advice of Lazard Brothers and, through them, of independent expert technical advice in this field. The BNOC has informed me that its judgment of the valuation of the assets would have resulted in a lower price. Valuations of this kind cannot be precise. I have concluded that the agreed price is a fair arm's length price taking into account all the advice I have received. Accordingly I am issuing specific direction to the corporation under Section 4(1) of the Petroleum and Submarine Pipe-lines Act 1975 in connection with the agreement.168W
Burmah and BNOC have also agreed to set up a separate joint company, with a 15 per cent. and 85 per cent. interest respectively, to acquire new licences on the United Kingdom Continental Shelf. Burmah has requested that a proportion of the oil to be derived from BNOC's interest in the Thistle field, acquired from Burmah, shall be available for purchase by the Burmah Group. It is agreed that any such arrangement shall be negotiated between Burmah and BNOC at an appropriate time.
Subject to an agreement on terms, I have expressed my intention of providing a guarantee under Section 42 of the Petroleum and Submarine Pipe-lines Act 1975 at best commercial rates in connection with finance for Burmah's share of the Thistle field.