U.s. Big Business Over North Sea Gas

A recent survey in the Financial Times gave an interesting account of how U.S. big business had got a hold of North Sea gas resources. The theme of the article was that we should be grateful for the massive American “<investment because without that the necessary development could not have taken place. Actually what the article proved was that lack of public’ investment had led to a vital natural resource being controlled by U.S. big business. The article commenced: "The most striking example of U.S. investment in this country is the American contribution to the North Sea search for oil and natural gas... The only all-British group with a major stake in the venture is British Petroleum...the Gas Board and Shell have gone in with 4ritish partners. BP is in fact one of the most successful companies in the world at finding oil and gas, and was the first to do so in the British controlled section of the North Sea. But there is a limit to the amount that one company can achieve, and the combined efforts of the American companies with their British partners are now much greater. At the end of September BP's total amounted to ten wells, including one discovery and five production. The total for all the companies involved in the search was 74, including 12 discovery, 14 appraisal and five productionsseeee "The largest is the Leman Bank, which was first discovered by Shell-Esso, and is now known to extend into a block belonging to the Gas Council-Amoco groupe Not only is Amoco a subsidiary of Standard Oil of Indiana, an American company, so are Amerda and Texas Eastern, which own the remaining shares. This group was also responsible for = °-discovering the Indefatigable field, which in turn runs into territory under the control of Shell- Esso. Finally, there is the Hewett field, which is shared by the Arpet and Phillips group, both of which are largely made up of American companies. The U.S. companies decided to embark on the North Sea search for two reasons The first was that the area seemed highly promising after the initial discovery of large reserves of natural gas in Holland, and oil companies are always interested in any promising prospect. But the rush into the North Sea would not have been so great had it not enjoyed such a favourable location. The sea is right in the middle of the fastest-growing energy market in the world, and once the oil or gas has been found there is relatively little difficulty about getting it to the consumer." But apparently even the Financial Times times recognisés there are some snags in this arrangement because...."For well over a year the companies and the Gas Council have bem locked in argument over the price at which gas should be sold once it has been brought ahsore. When the negotiations began the Gas Council was thinking in terms of about 1.8d a therm, whereas the oil companies wanted about 4.2d. Since then the gap has narrowed ~ slightly and the range is currently believed to be between 2.5d and 3.5d. +eeePrecisely what the American companies regard as a reasonable price is unknown, but if they do not receive ‘it some of them are bound to lose interest in the North Sea..." The Financial Times, of course, regards this as a potential tragedy. It is ironic that we see here a similar kind of conflict between U.S. companies and that which has taken place in numerous under-developed countries. The Labour Government, whilst it can spend millions of pounds to maintain troops in the Middle Fast to protect British interests in the Persian Gulf area, is unable to put enough to make U.S. investment unwanted.