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Dáil Éireann debate -
Thursday, 16 Feb 1989

Vol. 387 No. 3

Ceisteanna—Questions. Oral Answers. - County Cork Oil Facilities.


asked the Minister for Energy the proposals, if any, he is considering at present which would involve the reopening of the oil storage facility at Whiddy Island, County Cork and the modification of the oil refinery at Whitegate, County Cork; the producer countries with which he had contacts in relation to these proposals; and if he will make a statement on the matter.


asked the Minister for Energy the other Governments, if any, apart from the Nigerian Government, with which he is at present negotiating for the development of Whiddy and Whitegate oil refineries, County Cork.


asked the Minister for Energy if talks have been reopened between the Irish and Nigerian Governments about a possible takeover of the Whitegate oil refinery and the Whiddy storage depot; if he will outline his Department's plans for the future use and development of these facilities; and if he will make a statement on the matter.


asked the Minister for Energy whether there are proposals under consideration for the development of Whitegate and Whiddy oil facilities, County Cork; and if he will make a statement on the matter.


asked the Minister for Energy if his recent references to the development of Whiddy and Whitegate oil refineries, County Cork means that there will be equity participation from sources other than the Irish and Nigerian Governments; if so, the sources in question; and the proportion of the equity which will be held by each one of them.


asked the Minister for Energy if he has had discussions with the Nigerian authorities in relation to their proposals for the purchase of Whitegate and Whiddy Island oil refineries, County Cork.


asked the Minister for Energy if he has any plans for the development of the facilities at Whiddy Island, County Cork.

I propose to take Questions Nos. 1, 15, 23, 32, 33, 67 and 68 together.

I can tell the Deputies who have put down these questions that the Government are open to proposals which would lead to any or all of the following: (1) reactivation of the 1 million tonne storage and trans-shipment facility at Whiddy Island, and (2) continued operations and refinery upgrade at Whitegate. To this end, my Department have prepared a document to facilitate discussion with Governments or companies who intend to make such proposals. A significant level of interest has been generated but I do not intend, for reasons of commercial propriety and confidentiality, to identify, at this stage, the contacts which have been initiated.

I can say that discussions have taken place recently between officials of my Department and the Nigerian National Oil Corporation and associates including French, Italian and Japanese interests. The discussions were of a preliminary nature and considerable further detail is required before any comprehensive negotiation with this group is possible.

There are ongoing contacts with a European company related to a development at Whitegate.

In conclusion, I would like to make it quite clear that, first, I am not, at present, in receipt of any definite proposal from any source in relation to the oil facilities and, secondly, no exclusivity arrangement is currently in place with respect to discussions in relation to these facilities.

I am pleased to hear that there is no exclusivity arrangement involved in the discussions which are taking place and that it will not be confirmed to Nigerian interests. In principle it is good that we should make these facilities available to producer countries. May I ask the Minister if the discussions are taking place on a Government to Government basis or is he dealing through intermediaries? What level of control does the Minister think the State should exercise over the facilities in the event of some deal being done and what further criteria would he lay down to ensure that our strategic interests are protected in the event of a deal coming to fruition?

The Deputy has extended the scope of the question out of proportion.

As I have indicated in my reply we are only having very preliminary discussions and to go any further in relation to that matter would be imprudent. The fuels order which requires oil importers to purchase 35 per cent of petrol and gas oil requirements from the refinery was introduced to ensure the continued operation of the refinery. It is seen as an integral part of Ireland's oil supply security. It was recognised as such by the European Court of Justice and a change in ownership would not alter this position. It would be fair also to say that as far as the strategic national interest is concerned the Government would be very anxious to ensure that whatever final negotiations take place, the security of supply and the balance between ensuring that that happens and the proposals are kept in proper context. The Deputy can be assured that every effort, so far as I and the Government are concerned, will be aimed at safeguarding the national strategic interest.

Would the Minister not agree that for any producer country that might be interested in doing a deal along the lines he has described, the major carrot would be the compulsory 35 per cent off-take regime that exists in Whitegate at present? If that is now going to be made available to an incoming producer country it obviously would be very attractive for them. Would the Minister see any implications for controlling the price of the product which would be coming on to the Irish market given that a producer country would have a captive market and to some extent could ignore the prices that prevail on the world market, knowing that the product he produces at Whitegate has to be taken by the Irish consumer?

I explained to the Deputy in my reply that as far as any potential change of ownership was concerned the mandatory régime as presently operated is not up for grabs. We would have to take the totality of the proposals in context into account and make our own decisions in the light of these proposals. By taking a stab at one particular aspect without discussing the totality of whatever proposals might be presented to the Government I could not concede at this stage, at the point of preliminary discussions, what I might do. The Deputy who represents a reasonable share of commercial interests would not be inclined to go down that road and I have no intention of doing that either.

Perhaps a final question. I have some four questions to dispose of within the prescribed time and that time is fast running out.

I will be brief, a Cheann Comhairle. I take it from what the Minister has said that the 35 per cent compulsory off-take may not necessarily be available to somebody who might come in to do a deal in the Whitegate area. May I finally ask the Minister if he would be open to considering proposals for disposal individually of both the storage facility and the refining facility or does he want to have a situation whereby both of those would be taken together?

In most cases from the point of view of completing a satisfactory arrangement one could see a scenario where the use of the joint facilities in one composite proposal would have certain attractions. If separate proposals were to emerge in relation to either, these would be considered on the basis of their merits. I would have no hang-up about pressing for negotiations which would only be concerned with a development involving the two areas. I would be happy to take separate proposals provided these are satisfactory.

Question No. 2, please.

Is question No. 32 which is linked with the other questions buried or will there be an opportunity——

They are not buried, they are under discussion.

We are not permitted to ask questions.

That is the procedure as it stands.