asked the Minister for Industry and Energy the talks he has had with oil companies concerning the recent discovery of oil off the Waterford coast.
9.
Ceisteanna — Questions. Oral Answers. - Celtic Sea Oil Find.
8.
asked the Minister for Industry and Energy the proposals the Government have to ensure that the oil find in the Celtic Sea is developed in the interests of the Irish economy and the Irish people.
10.
asked the Minister for Industry and Energy if a proposal to pipe oil from the Celtic Sea directly to Wales has been discussed with any of the oil companies involved in exploration in the area; and if he will make a statement on the matter.
I propose to take Questions Nos. 8, 9 and 10 together.
Discussions have taken place with the oil companies involved in the recent discovery of oil off the Waterford coast. The nature of those talks must remain confidential in view of their commercial character.
I can say, however, that no proposal to pipe oil from the Celtic Sea directly to Wales has been discussed. I must emphasise in this context and in regard to the Deputies' questions generally that, while Gulf's well 49/9-2 yielded very encouraging test results, further appraisal work, both seismic and drilling, is necessary before the commerciality or otherwise of the find can be established. Consequently no plans for the development of this find have been put to me. The provisions of our licensing terms are designed to ensure that the national interests are fully protected in the case of an offshore development.
Studies are in progress, both within my Department and on an inter-departmental basis, to examine the implications of a commercial oil find from both the economic and infrastructural points of view. Contacts both at ministerial and official levels are being made and maintained with the authorities of other European countries who are already involved in offshore production.
The Minister has stated that the question of piping oil to Wales has not been discussed. Will he indicate if such a proposal has been made to his Department? Also, in the light of the most recent find of oil, will he indicate whether any reassessment of previous oil finds have been made which may make these finds more commercial? Further, will he indicate if there are any concrete proposals, as against kite-flying, for the provision of additional oil refining capacity here?
With regard to the first part of the Deputy's query, there are no proposals before my Department regarding piping the oil to Wales. With regard to previous finds, all the data associated with the drillings are available in my Department, have been assessed by experts in my Department and obviously will continue to be available to them. We are very encouraged by the flows in this well because it gives us reassurance that we can expect a comprehensive exploration programme in the Celtic Sea basin in the next few years. The number of inquiries gives us encouragement that the basin will be explored comprehensively. With regard to the third part of the question, there are no concrete proposals before my Department for the establishment of an additional refinery.
Will the Minister give the date on which the second appraisal or step-out well will be drilled in 49/9-2?
As yet there have been no concrete proposals put to my Department. There have been preliminary approaches to my Department with regard to the drilling of the first appraisal well. However, it is likely that the well will be drilled before the end of the year.
In relation to Question No. 9, I should like to ask the Minister if he is prepared to make arrangements for the reopening of yards such as the Ross Company who have experience in this field? In a written reply to a question put by me the Minister stated that Irish interests earned £66 million to date, or one-third of the total available business in oil exploration. What does he intend to do to improve the situation to ensure that Irish interests get all of the business?
That seems to be widening the scope of the question.
It is along the lines of Question No. 9.
It is not really, but I am prepared to answer the Deputy. The Ross Company is in receivership and the IDA are actively pursuing the possibility of a viable take-over for the yard.
We cannot have a debate on the receivership of some company.
It is an Irish interest.
There is an endless list of items that are of Irish interest but we cannot deal with them without notice at Question Time.
If the find proves to be commercial I would expect a higher interest in a take-over of the Ross Company. However, this is not yet established and is outside my control. With regard to the involvement of Irish business interests in serving the oil industry, of the market available to Irish business interests over the past few years there has been Irish participation of up to 85 per cent.
Some of the market is not available to Ireland. For instance, we do not have our own rigs so we simply cannot sell, hire or rent them to exploring companies. Of the available market to Irish business and industry we have a market penetration of approximately 85 per cent.
In the event of the oil find being successful will the Minister assure the House that Whitegate oil refinery will not be by-passed and that its refining capacity will be utilised to the maximum in relation to the oil find?
We have our own refinery which is operating. It would be natural to use the Whitegate refinery for any oil find. I wish we had this find declared commercial before we start spending all the money. We do not know the extent of the find. If there is to be a commercial find we do not know if it will be a small, medium or large find and all the economic complexities involved in such a find, if it is declared commercial, are being examined by an inter-departmental committee. All the options, available, such as the upgrading of the refinery, are under examination.
May I ask the Minister——
No. A Supplementary from Deputy Gene Fitzgerald and a final supplementary from the Deputy who put down the question, Deputy De Rossa.
We all hope that the oil find is commercial. If the Minister of State receives a submission for piping this oil to Wales, will he give a categorical assurance to the House now that he will reject it?
I have no submission before me. I do not wish to go into speculation or answer questions that are superfluous in many regards. Obviously, the question of piping to Wales does not arise as far as I can see at the present time.
(Interruptions.)
As the Minister put such emphasis on the commercial viability of the find and as previous finds have been declared non-commercial, could he indicate that the decision in relation to whether it is commercial will be related to Ireland's needs rather than to the needs of the multi-national companies who control the wells and who carried out the exploration, and the question of whether they are commercial in terms of world markets will not come into the consideration of whether they are commercial? Will the Minister only take into consideration the question of whether it is commercial and worth while for Ireland to have this oil off our shores?
I appreciate the import of the Deputy's question. It is up to the consortium who have this licence and who have drilled the wells to decide if it is commercial or otherwise. I should add, however, that there is as much an incentive for the consortium to declare it commercial as there is on the Government to have a commercial oil find. It is costing millions of pounds to explore and, quite obviously, they would be more than anxious to recoup their investment as quickly as possible. I do not see any major conflict in this area. Of course, my Department have their own Petroleum Affairs Division and have their own experts. We will be as well informed as the consortium regarding the field and its commerciality or otherwise.
Would the Minister of State, because of the reasonable prospect of oil being there, now agree that the decision to downgrade the oil fired stations should be dropped for the time being?
That is not a question. It is argument. I am calling Question No. 11.
11.
asked the Minister for Industry and Energy the proposals the Government have to ensure that there will be adequate refining capacity within the State to process oil from the Celtic Sea.
There has not yet been confirmation of a commercially viable offshore deposit in the Celtic Sea. However, studies are at present in progress of the implications for the economy, under various headings including the processing question, of commercial oil production in that area.
To some extent the question has been dealt with in previous supplementaries but the question of whether Whitegate will be upgraded in order to be able to cope with any oil find has to be dealt with. Could the Minister indicate if any studies have been made in relation to what would be required to ensure that Whitegate will be capable of coping with a find?
I have already indicated that there is an inter-departmental committee at present examining the whole question of the consequences of an oil find. Of course, that matter is one which will be under consideration by the inter-departmental committee.
Question No. 12.
May I ask one final supplementary?
If the Deputy thinks that his supplementaries have already been dealt with, I assure him he will not lose any marks by not asking them.
I said most of them but there are still a number of areas which need to be covered. It may not be a very big oil field but it is certainly a big field. I am sure the Minister is aware that Whitegate only has the capacity to serve about 50 per cent of the Irish market. If there are no private proposals for additional refineries in the State are the Government considering providing an additional refinery in order to provide for the total oil capacity in the State?
The answer is no, the Government are not considering the establishment of any new refineries in the State. However, if private interests come forth with concrete proposals, they will be fully processed by my Department.