asked the Minister for Industry and Commerce whether his attention was directed to the statement made by the Chairman of the London Thames Haven Oil Wharves, Ltd., at the Fortieth Ordinary General Meeting of the company in London on March 28th, to the effect that under arrangements made with the Government of Éire, the Irish National Refinery Company, which has intimate financial associations with London Thames Haven Company, was granted a licence to refine and manufacture the whole of the petroleum products required in this country, and accordingly that the company is assured of a constant equal profit which will enable it to pay a dividend of 10 per cent. on £1,000,000 Ordinary Share Capital and 5 per cent. on £1,000,000 Debentures, and whether he can confirm if the statement referred to is founded on fact.
Ceisteanna—Questions. Oral Answers. - Oil Refinery Company.
I am circulating with the Official Report a statement containing a summary of the arrangements made between the Government and the promoters of the refinery project.
Following is the statement:—
In accordance with arrangements agreed between the Government and a group with which the London and Thames Haven Oil Wharves, Limited, are associated, a new manufacture licence was issued to Irish National Refineries, Limited, on 16th July, 1936. The licence authorises the company to refine crude petroleum for the manufacture of petrol, kerosene, white spirit, gas and fuel oils, lubricants, asphalt, and all other petroleum products. The following is a summary of the arrangements:—
1. The proposals provided for the formation of two Irish companies, each with a capital of not less than £500,000 with the right to provide the further finance required by means of debentures bearing, in the case of the refinery company, interest at 5 per cent. per annum with a sinking fund of 5 per cent. per annum for amortisation. Since the date of this understanding two Irish companies have been formed, viz., Irish National Refineries, Limited, and Liffey Transport and Trading Company, Limited, hereinafter respectively referred to as "The Refinery Company" and "The Trading Company." The nominal capital of each company is £1,000,000.
2. The refinery company will carry out the work of refining and sale of the refinery products in Éire. The trading company will acquire from the refinery such products as will be required solely for export.
3. An arrangement will be entered into between the refinery company and the export company for the production of all petroleum products required by the latter on such terms as will reimburse the refinery company the costs of refining and provide a small working profit.
4. The Minister has received an undertaking that the profits derived from sales in the Irish market shall not be used to subsidise the trading company.
5. It is provided by the articles of association of the refinery company that the distribution of profits, by way of dividend, bonus, or otherwise, on the shares of that company shall not on the average exceed 10 per cent. per annum after the provision of reasonable reserves for depreciation, obsolescence, and contingencies.
6. The arrangement provided that the draft memorandum and articles of association of the refinery company should be subject to the Minister's approval, and a clause has been inserted in the articles to the effect that no alteration can be made in them without the Minister's consent.
7. The appointments to the board of directors of the refinery company are subject to the Minister's approval, and in addition, he has the right to nominate a representative on the board.
8. The voting control is vested in certain of the shares, and the holders have agreed that such shares are issued and transferable only with the Minister's concurrence. It is also agreed that the voting-control shares are held by a trust company whose registered office is in Éire.
9. The appointment of auditors to the refinery company can be made only with the Minister's approval. An undertaking has been received that copies of the annual accounts of the refinery company will be supplied to the Minister, and in addition any such further information that he may require for the purpose of satisfying himself that the undertakings given by the refinery company are being carried out.
10. It is agreed that the refinery company will afford Irish investors the right to obtain at par not less than 50 per cent. of its share capital and debentures. The same arrangement applies to any additional capital or debentures which may be required at a later stage.
11. The Government have, at the end of 21 years, an option to acquire the undertaking of the refinery company on the basis of:—
(a) the actual cash paid on the shares of the company, and
(b) the payment of amounts owing to debenture holders.
It has also been agreed that the Government may acquire the capital and debentures of the trading company at a price to be fixed by agreement. The necessary provisions have been made in the articles of association of the refinery and trading companies to give effect to these arrangements.
12. The refinery company has undertaken, immediately the refinery is in operation, to train Irish nationals for the higher technical positions. The Minister has expressed his intention of facilitating the company by granting exemption from the conditions of the new manufacture licence in respect of certain non-national skilled workers until such time as Irish workers have been trained to fulfil the duties in question.
13. The Minister has undertaken to facilitate the refinery company, so far as he has power to do so, by the issue of licences for the duty-free importation of such machinery, plant, and equipment as cannot reasonably be obtained from Irish manufacturers. He has also promised to make such arrangements as will enable the crude oil required by the refinery to be imported free of duty.
14. The Minister has undertaken to take such steps as he may be empowered to do and as may be necessary to give adequate protection to the proposed industry in so far as competition from imported products is concerned.
15. In connection with the possibility of a competing refinery being established in Éire, the Minister has given an undertaking that, before granting a new manufacture licence, he will have regard to the extent to which the needs of the country are capable of being supplied by the refinery contemplated by the present arrangement.
16. Provided the various undertakings given are carried out, and the conditions of the new manufacture licence are complied with, the Minister has given an undertaking that he will not be prepared to grant facilities to persons or firms wishing to establish a competing industry.
17. In so far as the existing refineries are concerned, the Minister has made it clear that he does not desire that their present activities should be disturbed. He has, however, given an assurance that, in so far as suitable materials for such refineries can be obtained from the refinery company, it would not be in accordance with his general policy to arrange for the grant of facilities for duty-free importation where he is satisfied that suitable materials are available from home sources.
18. With regard to the possibility of the development of the refinery at present operating at Haulbowline to such an extent that the success of the new refinery would be prejudiced, the Minister has given an assurance to the promoters of the latter that he will take such steps as will be necessary to ensure that—
(a) the quantity of crude oil processed at Haulbowline shall not exceed approximately 30,000 tons in any year, and
(b) that the output of petrol produced by that company therefrom shall not on an average exceed 3,000,000 gallons a year.
The throughput of crude oil referred to and 3,000,000 gallons of petrol represent the quantities agreed upon with the promoters of the Haulbowline scheme in the course of negotiations in connection with the establishment of that refinery.
19. As regards the prices of the products of the new refinery, it has been provided that the products will be delivered to existing distributors at such prices as would have enabled them, after recouping themselves with distributing expenses and a normal profit, to sell at prices approximately equivalent to those ruling at the time the arrangements were entered into. Arrangements have been made to give effect in the ex-refinery prices to fluctuations in the cost of crude oil, freight, labour and other charges.
20. A definite understanding has been obtained that the quality of petrol and other petroleum products turned out by the new refinery would be at least of the same standard as the average quality at any given time in Great Britain.
21. The products of the refinery in so far as they are required for the Irish market are to be supplied to existing organisations engaged in the distribution trade in approximately the same proportions in which similar products were handled by these organisations prior to the date of the issue of the licence or on such other basis as may be agreed. An undertaking has been received that in the event of its not being found possible to continue existing arrangements the refinery company will be prepared to arrange for distribution or alternatively will be agreeable to the Minister's making whatever arrangements he considers necessary to ensure a continuance of distribution.
22. It has been provided that in the event of the refinery company's not being in a position to supply the products of the refinery in sufficient quantities to satisfy the reasonable demands of the Irish market, the Minister will be entitled to take such steps as he thinks fit to arrange for such supplies.
23. The new manufacture licence provides for the operation of the refinery within two years of the date of issue. Provision has, however, been made for an extension should a delay occur through causes not within the control of the refinery company.
24. It has been intimated to the Minister that it is the intention of the refinery and trading companies to acquire and operate their own oil tankers. It is understood that orders for these tankers have in fact already been placed.
25. London and Thames Haven Oil Wharves, Limited, have undertaken to provide the necessary experts to control the design, erection, and operation of the proposed plant.
26. The arrangements provide for the giving of an assurance to the Minister by the refinery company and London and Thames Haven Oil Wharves, Limited, that the refinery company will be in a position to enter into contracts for securing the necessary supplies of suitable crude oils.
Does that summary contain any report or reference to a report submitted to the Minister as to the prudence or safety of establishing this oil refinery, with all its appurtenant storage facilities, so near the residential City of Dublin?
Wait and see.
That is quite a separate question.
The Minister said he was publishing a complete report.
I presume the Deputy will see that report and will have an opportunity of questioning it.
When will this report be circulated?
It will be published in the Official Report.