Vol. 400 No. 9
14 Mrs. Taylor-Quinn asked the Minister for Energy if he will outline the future he envisages for the mandatory offtake of oil products by oil companies in a new development of the Whitegate facilities in County Cork.
21 Mr. S. Barrett asked the Minister for Energy if he will outline the relationship with oil producers which he envisages in future investment plans.
22 Mrs. Taylor-Quinn asked the Minister for Energy whether in his discussions regarding the future development of Whitegate Oil Refinery, County Cork, he has identified the distribution network which will be available for sale of refined oil products over and above the mandatory volumes.
28 Mr. S. Barrett asked the Minister for Energy whether he has received the report of the task force on investment options for Whitegate and Whiddy Oil Refineries, County Cork; and if he will make a statement on the matter.
47 Mr. J. O'Keeffe asked the Minister for Energy when he expects to announce decisions on the upgrading of the Whitegate Oil Refinery and the reactivation of the Whiddy Oil Terminal, County Cork.
51 Mr. J. O'Keeffe asked the Minister for Energy whether he will publish the report of the task force, which was set up in May 1989, to identify investment options for the Whitegate Refinery and Whiddy Oil Terminal, County Cork.
61 Mr. Barry asked the Minister for Energy the present position regarding the Whitegate Oil Refinery, County Cork; if it is expected that outside interests will invest in it; if he will outline these interests; and if he will make a statement on the matter.
I propose to take Questions Nos. 14, 21, 22, 28, 47, 51, and 61 together.
INPC operations encompass the purchase and refining of crude oil, the supply of 35 per cent of the market requirements of petrol and gas oil to the distribution companies and associated trading of intermediate and final petroleum products.There are no plans for an expanded role for the corporation in the area of distribution and retailing.
The Programme for Government Commits the Government to seeking an upgrade of Whitegate refinery with third party participation so that oil product consumers in Ireland will be supplied by full free market channels and are not, therefore, put at any competitive disadvantage.
A task force was established in May 1989 by decision of the Government to identify all realistic investment options for the facilities at Whitegate and Whiddy.
With the assistance of international consultants, the task force evaluated the technical, economic and financial aspects of the options which they identified. Because of the wealth of technical and financial detail concerning the possible future operations at the refinery contained in the task force report, it is not considered appropriate to publish all of this information, much of which is highly confidential. The report could be used to advantage by potential competitors in the refining industry.
In the meantime I am continuing to pursue appropriate opportunities which might lead to an oil producer or international oil company participating in the proposed upgrading of the refinery and reactivation of the terminal. Because of their confidential nature, I am not in a position to discuss the details of individual approaches made by third parties regarding these facilities. No specific relationships with an oil producer are envisaged in the current context for an upgrading project at the refinery. However, I have reasonable expectations that oil interests will participate in such a project. Discussions with interested parties are ongoing but no final proposals are under consideration by me as yet.
I appreciate the confidential nature of this issue but may I ask the Minister to give some indication of his thinking on the status of the 35 per cent offtake under an agreement he would conclude? Is he satisfied that a future operation seeking to distribute oil from Whitegate would be able to enter the market successfully for the excess over the 35 per cent offtake in the face of the existing distributors in that market?
As the Deputy is aware, the present mandatory offtake level of 35 per cent was established under a fuels order and was introduced to secure the continued operation of the Whitegate refinery. However, the Government are committed to seeking an upgrading of the refinery with third party participation so that oil product consumers in Ireland, notably business consumers, are not put at any disadvantage relative to overseas competitors by the eventual removal of the obligatory update.
It is clear from what I have said that it is the intention to remove the mandatory offtake of oil products by oil companies. That is part of the agreement in the Programme for Government. It is a matter for any interested third party as to what arrangements he would make in relation to the distribution of products from an upgraded Whitegate refinery. It would not be a matter for me to discuss at this point in view of the fact that, first, we are continuing discussions with a number of interested parties and, secondly, it is more a matter for the third party than for me at this stage.
Can the Minister give even an approximate time frame for the conclusion of the ongoing discussions which he mentioned? I raised this issue with the Minister about six months ago and I am sure he understands my concern about it as it relates to my constituency. Can the Minister indicate when he hopes such negotiations will come to a conclusion?The Minister said he is having discussions with a number of parties. Can he give an indication of the number of companies involved — is it two, four or ten — so that we will have an idea of the extent of the interest involved?
In view of the Deputy's constituency interest I can well understand his concern about this matter. However, it would not be appropriate for me to give any information about the people with whom we are having discussions on this matter. It would be impossible for me to give an estimate of the length of time these discussions could take. I probably share the Deputy's frustration — if he is frustrated and I certainly am — at the length of time it is taking for me to be in a position to make positive recommendations to the Government in the matter. I am very keen to achieve a successful contract or settlement with an interested third party for the upgrading of the Whitegate Refinery and, in the event of a successful outcome to the planning appeal, to the reactivation of the Whiddy facilities. These discussions are taking much longer than I had thought or hoped. I put an estimate on the length of time before but it was not achieved, and I do not think it would make things happen any quicker now. I can assure the Deputies that this is a matter of top level priority in my Department. The task force have completed their work so we have all the technical information which will assist us in advancing discussions to a more positive stage but, again, it depends on the interest of the third party and whether he intends to go ahead.
I want to take up one specific point the Minister made in his earlier reply. He said he has no plans for a specific relationship with an oil producer. Does the Minister not agree that this is out of tenor with the general trend of the oil industry at present where facilities such as Whitegate and Whiddy are specifically attractive to oil producers seeking entry into the European market? Is the Minister, by deciding not to go that route, cutting off a valuable opportunity for developing those facilities?
No, I am not cutting off any alternatives. In my reply I said that no specific relationships with an oil producer are envisaged in the current context for an upgrading project at the refinery. I did not exclude it.
