Dáil Éireann debate -
Wednesday, 20 Jun 2001

Vol. 538 No. 4

Irish National Petroleum Corporation Limited Bill, 2001: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. M. Ahern

I thank the Chair for the opportunity to make a brief contribution on the proposed sale of INPC to Tosco Corporation. My real interest which is in Whitegate Oil Refinery goes back to the 1950s when it was built. I did not have any great interest in the refinery in the 1950s but I had an interest in the sweets I received from those working there. That is something I have never forgotton. Down through the years, the refinery met troubled times and finally ended up closing in 1979. Since then, negotiations have taken place between the Government and the owners and in 1982, the Government decided to take over the refinery.

In February 1982, I was elected to the Dáil and my first function as a TD was to go to the reopening with the then Minister, Deputy Albert Reynolds. Since then the refinery has progressed and stayed in operation. In difficult times it provided a good service to the country. However, it has had to put in large investment to keep it up to date in order to meet the environmental standards and requirements imposed and demanded by the public.

Without the mandatory regime, it would not have been able to survive. The problem facing this Government and others in recent years was the power of the Government to ensure that the mandatory regime would continue in place. With the refinery facing further costs of about £100 million to £200 million by 2005 to meet the Auto Oil II requirements, it was incumbent on the Government to look at all the aspects of the future of the refinery and especially the issue of whether the refinery, out of its own resources, would have been able to finance the refurbishment and upgrading that would be required in future years. The Government wisely took the best decision to ensure the continuation of the refinery so that the employees would be assured of the future of their jobs.

As the Minister made quite clear in her speech, over the last year detailed negotiations were carried out with many different bodies that were interested and finally a decision was made that Tosco Corporation was the best of those who were interested. Even though people in this part of the country were not aware of Tosco Corporation, it is now clear that this is one of the big players in the United States and will become even more important following the merger with Phillips Petroleum Corporation. It will be moving into Europe for the first time and I believe it sees Ireland as being the ideal stepping stone to moving to this part of the world.

It has met the considerations that the Government felt were necessary for the sale. The Tosco Corporation is guaranteeing the operation of the refinery and the oil terminal in Whiddy for at least 15 years on a fully commercial basis and that is without the support of the mandatory regime. It has given a further undertaking to maintain existing jobs and conditions of employment. Those are the two main areas that the workers to whom I spoke were concerned about. I take the word of the Minister that this undertaking copperfastens the number of jobs and the conditions of employment.

It has given a substantial undertaking to continue to operate the refinery and oil terminal for at least 15 years. We have had an example of another organisation in the constituency, which took over a semi-State company five years ago and that company gave an undertaking to operate for five years. Even though this was a different business, they held to the conditions and I believe that this business will continue to operate after the 15 years.

Security of supply was raised. Some people have asked whether the national oil reserves will be under the control of the National Oil Reserves Agency – NORA. I am glad the Minister has clarified that the 90-day stocks of oil, in compliance with international obligations, will be maintained under the control of the National Oil Reserves Agency. The Minister has confirmed that NORA is not part of the transaction and will continue to operate in the state sector. It is very important that the national strategic stocks will still be under Government control.

The mandatory regime will be abolished and INPC and the State will not be faced with the burden of future investment requirements beginning with Auto Oil II in 2005. As I said earlier, this is a vital element of the decision the Government has made. It would have been an unbearable burden on the State and on INPC to find the finance to fund the upgrading necessary to comply with Auto Oil II.

An ESOP is being set up and this will be very beneficial to the workforce. From speaking with them I know they are delighted with the approach the Minister is taking on that. Pensioners and current employees raised concern about the pension fund. They wanted confirmation that the pension funds would be guaranteed into the future. From our committee meeting last week as well as the legislation that is in place, I know that the pension funds of the refinery workers come under the current legislation. They have no need to worry about their pensions.

At our committee meeting last week, I raised the issue of the land. Unfortunately, I did not get a reply as a vote was called. There are approximately 140 acres of land not being utilised by the refinery. Many farmers in the area have been asking if the State could sell some of it to local farmers. Will the Minister comment on that in her reply? Although I would prefer the refinery to be maintained in the control of INPC, we have to look at the facts and judge how future events will develop. In that context, the decision taken by the Minister is the correct one and, in the years to come, we will still have a refinery in Whitegate, with the standards of safety, health and community participation which have operated over the past 30 years. The refinery has been a welcome feature in the East Cork area and if, as we hope, it is maintained by the new management, I have no doubt it will retain that esteem in future.

Mr. Sheehan

I commend the Minister on introducing this legislation to the Dáil and bringing it forward before the end of this session. I hope all potential loopholes in the Bill are fully explored.

The Minister's comments in recommending the Bill to the House highlighted a number of fundamental issues which the Government does not always prioritise.

I know the INPC company has carefully studied proposals from many companies for the take-over of its business. There are excellent people at the helm of INPC, with their feet firmly on the ground and their hearts in the company and in the localities of Cork and Bantry in which they operate. They have worked against the odds to turn the Bantry terminal and Whitegate refinery into good viable companies that attracted strong interest from prospective buyers. I trust their judgment in recommending the TOSCO oil company to the Department. I know the Minister and her officials meticulously studied this deal and vigorously negotiated it. I have met the TOSCO management and I am of the opinion that they are capable and honest people with serious plans for the Whiddy terminal and Whitegate refinery.

In recommending this Bill to the Dail, can the Minister assure the workers of the long-term security of their jobs? None of us, on any side of the House, should promote the sale of State assets unless we are satisfied the future is secure and it will blossom to the further benefit of the workers and the State. I represent one to the most beautiful parts of Ireland, where there is the perfect mixed economy of farming, fishing, industry and tourism. The revival of the oil industry in Bantry Bay brings with it hope and anxiety. The Minister, her Department and all of us in this House must ensure that the oil industry will be a good neighbour to all the other native sources of income in that area.

In Bantry Bay, we have the second largest fishing port in lreland, Castletownbere, which is the country's largest white fish landing port. We have a mariculture and aquaculture industry which is second to none. It provides local employment for almost 500 people, directly and indirectly. The people of that area must be assured that their livelihoods will not be endangered by this new deal. Our very progressive fish farming industry must feel secure. We have a wonderful tourist business based on the beauty of the area and the warmth of its people. All these major contributors to the well-being of our community must be assured that every effort is made to ensure the oil industry is managed and monitored to the highest standards and that, far from being a threat to their business, it will instead bring benefit to them.

The Minister visited Bantry Bay a few years ago and experienced, at first hand, the difficulty of getting in and out of Whiddy Island, where the oil terminal is located. Bantry does not have the facilities to manage and monitor the regular movement of very large tankers and all the harbour craft and tugs that will be required to support such movement of oil. To paraphrase one of the Minister's colleagues, the Government has "floods of money" and this deal will add to the wealth of the Exchequer. I urge the Government to pay attention to the fundamental needs of the people of West Cork when the Minister for Finance, Deputy McCreevy, is counting out yet more money in his next budget later this year.

Under the leadership of Dr. Garret FitzGerald as Taoiseach, my party scheduled a budget of £16 million for infrastructure needs around the Bantry Bay area. This was on foot of the receipt of £46 million by the Government at that time from Chevron Oil, who decided to pull out of Bantry bay in 1985. Fianna Fáil, on returning to Government in 1987, immediately pulled back more than half this money and used a portion to pave Grafton Street instead of improving the facilities in Bantry and the Bantry Bay area. I hope this time the Government will leave the paving of Dublin streets to those who amassed wealth from the Celtic tiger and who seem to be exclusively resident in the Dublin area. I urge the Minister to be considerate of the needs of Bantry Bay and West Cork.

The Minister for Finance should step down from his high horse on the plains of Kildare and try stepping into a boat in Bantry Bay. He would then see how difficult it is to operate that mode of transport in a Bay that is bereft of basic safe facilities for the movement of people and craft. Our Taoiseach is no stranger to Bantry, where he is proud to speak of his maternal relatives. I hope he will remind his Minister for Finance to be suitably considerate of the people of that area in the Government's forthcoming financial provisions. Proper infrastructure is of paramount importance for the survival of industry in the Bantry Bay area. Proper infrastructure consists of a proper pier. The day the Minister went out to Whiddy Island she saw the serious neglect of the Bantry Bay area, as evidenced by the lack of a proper pier. Industry will not survive in any part of Ireland without proper infrastructure being in place. Therefore, I urge the Minister when she gets an opportunity to get extra funding, to outline to the Minister for Finance the need for a special allocation in the budget for the advancement of the pier in question. In order to progress, it is essential that she embarks on that course of action. If the infrastructure is not put in place the future of the Whiddy terminals and of Whitegate will not be so rosy.

It is also of primary importance that indigenous Irish fuel companies, which have a heavy dependence on fuel supplied from the national refinery in Whitegate, are safeguarded. Purchasing fuel from the national refinery enables indigenous Irish fuel companies to acquire products at competitive costs. This fuel can be purchased at rates that enables the smaller Irish fuel companies to compete with the larger oil companies. The smaller Irish fuel companies which include Tedcastles, Maxol, Emo, Morris, Campus, Estuary and Staffords currently hold 26% of the national market share. The share held by Irish oil companies is higher in rural Ireland. For example, Top Oil holds an 8% market share nationally but this company has a much larger share in the Munster region.

Competition provided by Irish fuel companies results in lower fuel prices for consumers in the areas they service. They provide alternative fuel supplies to a range of consumers for their motoring, home heating, agricultural and commercial requirements. In areas in which Irish oil companies compete with the major oil companies, they have a lower price for consumers. A recent AA survey highlighted that cheaper fuel prices and competition applies in areas where Irish companies are present. Competition is the life blood of trade as far as any industry is concerned. I urge the Minister to make sure in the regulations she is inserting into this deal with Tosco that those companies will be borne in mind and that they will not be prohibited, maybe in a few years time, from supplying much needed fuel to the people concerned.

Given the importance of Whitegate to the Irish economy and the consequences of allowing a large multinational company operate it as a private monopoly, it is imperative that the legislation contains some control on the purchaser of the refinery and a mechanism to oblige the purchasers to honour the commitments they seem to have given the State in private negotiations.

Accordingly, the legislation should oblige the new owners to make supply available to the State at the current market prices, to offer the fuel to customers on a non-discriminatory basis and to produce a sufficient range of products to meet strategic fuel needs at a given time. The deal should adhere to a defined arbitration procedure for the settlement of disputes with customers. It should spell out and honour the commitments given to the State as part of the private negotiations between INCP and the new owners. The refinery should operate in a way that recognises the critical role of the refinery in the economic and commercial well-being of the State for as long as the refinery remains the only refinery within the State. Access should be granted to refinery facilities for third parties on a national discriminatory basis in so far as the facilities are not needed for the purchasers activities at any time for as long as the refinery remains the only refinery in the State.

As far as I can gather, this Bill does not contain one such provision. The State is relying entirely on the purchaser of the refinery to place considerations that are important to Ireland ahead of commercial issues affecting a global company operating in a volatile environment and driven largely by shareholder concerns. Surely, the national interest and strategic considerations require statutory protection rather than mere promises advanced in the course of commercial discussion.

We saw what happened in Bantry Bay when Gulf Oil was introduced almost 40 years ago. Gulf Oil got the use of one of the finest bays in western Europe, Bantry Bay, which at one time Great Britain boasted could hold its entire fleet. The use of that bay was handed over by the Government to Gulf Oil without a shilling of compensation. No revenue accrued from the millions or billions of tonnes of crude oil landed at that storage depot in the Whiddy tanks. I guarantee the Minister that if a proper deal had been made at that time not only would west Cork be rolling in riches today, but the country would be rolling in riches as well. Proper legislation passed by this House must include proper procedures. I do not want to see a similar situation emerge where the only return Gulf Oil gave to Bantry Bay was a statue of St. Brendan in the square looking out at the bay – a marble statue which is still there. However, statues do not butter the bread of those concerned.

I insist that the Minister make available to the House as quickly as possible the full details of the deal concerned so that every paragraph of it can be scrutinised by the Members of this House to ensure we are not again 40 years on giving another gift to an international oil company without conditions and maybe without guarantees. We all know what international conglomerates can do when they get their foot in the door of certain industrial developments. I do not want us to make the mistake that was made with Gulf Oil. While I welcome this deal with open arms, I would be happier if we had the full text of the agreement which could be read to Members of Dáil Éireann. I have met the company officials and feel that they are honest, active and very proficient industrialists with an enormous amount of experience in the industry. But we are handing over a State jewel. INPC in its wisdom and the Government were very mindful of the development that could ensure that single point mooring be put into operation in the bay. For that I say thank you. It was the first step in attracting this giant American conglomerate into the bay.

I ask the Minister to give an assurance in this House that she will not sign any deal without having perfect knowledge of all aspects of it. I am not doubting the Minister's capacity, I know her to be fit and able to rise to the occasion, but I ask that the same mistake as was made with Gulf Oil is not made again.

Mr. Kelleher

In time to come there will be another statue next to St. Brendan looking out into the Atlantic, a tribute to Deputy Sheehan and his efforts on behalf of west Cork.

Mrs. O'Rourke

A statue to P.J.

Mr. J. O'Keeffe

Cast in bronze.

Mr. Sheehan

No, cast in gold.

Mr. Kelleher

I welcome the opportunity to discuss the issue of Irish National Petroleum Company, the Whitegate Oil Refinery, its future and that of its workers. The Government had to make a decision whether investment would come from the Exchequer or to sell it off to a company willing to invest and develop the refinery. I know that the Government spoke to various parties and was prepared to approve the investment in the programme. However, it was concerned at the costs involved in upgrading the refinery to allow it to continue to function. A decision had to be made and I welcome it. It is a deal which is progressive and one which gives the workers their pension rights and all the other aspects which will be addressed in this issue. More importantly, we will have employment and an oil refinery in Whitegate for the next 15 years.

I have a small concern which I hope can be addressed. In a national emergency, or in the event of outbreak of war or any problems associated to the supply of petrol to this country, the Minister has stated that she has a provision whereby she can more or less take over the running of the refinery but I am not sure if that is the case. I know Tosco has given commitments to run the refinery and the oil terminal for at least 15 years on a fully commercial basis without the support from the mandatory regime and there is a further undertaking to maintain existing jobs and conditions of employment. That sounds very good in 2001 but I am concerned about the state of the facilities in 2016. Will we have a dilapidated, run-down oil refinery? The company may fulfil its commitments over the 15 years but is there a continuing programme of reinvestment provided for in the agreement? I would be a sad if in 15 years' time we had an oil refinery that is completely out of date, has been ran into the ground and has no investment forthcoming.

Effectively, we would have storage depots in Whiddy with the ability to store oil for 90 days but no manufacturing facility. I am hopeful that there is something in the contracts – which will be published when this Bill is passed and the deal signed – whereby there will be some form of investment to ensure that we have an oil refinery in the event of an emergency. Suppose something happens in 2014. Tosco will have almost completed its term of commitment but if there was a national emergency we could be taking over something that is non-operational or not able to carry out the function we expect of it. I hope the Minister can clarify that issue.

INPC, as a small stand-alone company, is certainly exposed to the various changes in the international oil markets. Being taken over by a large company does protect it to a certain extent. The mandatory regime will not be in operation for the support of the refinery. We like to look at the free market and ensure that all projects stand alone. However, if we are willing as a nation to fund Whitegate refinery to the mandatory regime, it would be a pity if, in 2008 or 2009, Tosco were to say it could not honour the com mitments made in 2001 or that it found it impossible to operate profitably. We would then have two choices. It could leave and offer compensation or we could introduce a mandatory regime to support the refinery, then at least we would have something when the fifteenth year is up. I raise that because I believe it is important for an island nation to have a certain level of security which allows it to refine its own crude oil. We have the 90 day storage and the area of interconnectors and dependence on gas is all very fine, but refining our own oil is something we should look at in the overall context.

The National Oil Reserves Agency, NORA, maintains strategic 90 day stocks in compliance with international obligations. Although currently a subsidiary of INPC, NORA is not included in the transaction and will continue to operate in the State sector. That is very important but, as I pointed out, if there is no refinery to refine the reserves, we are back to square one. It is something I would like the Minister to clarify in her summing up. Tosco has indicated an intention to establish its new European headquarters in Dublin and to invest in Whitegate and Whiddy on a commercial basis. We all welcome that. If, as things change, there is no commercial basis for investment, we will find that there will be no investment forthcoming. It is something I would also like to have clarified. Having spoken with some of the workers, I believe the commitments the Minister has made and the commitments Tosco is willing to enter into in regard to the workers and their entitlements are welcome.

There is always great concern when we talk of selling off a State asset. The first fear expressed is protection of the rights of the workers. There is concern regarding the ISPAT plant. A good redundancy package was offered to workers on the sale of Irish Steel to ISPAT, but in the event of the closure of ISPAT the workers who stayed on with that private company for those extra five years out of a loyalty to the company or for whatever other reason will not receive the generous redundancy packages that were given by many State companies. I hope all those issues will be tied down in the meat and bone of the small print of the contract. I could draft something similar to this script, the contents of which are welcome, but it is vague. It is important to ensure that the protection of workers' rights, including pension entitlements, is covered in the small print. Such rights have not been protected in some instances, the position of workers in the ISPAT plant being a case in point.

Another issue of concern is the impact of the implementation of the Seveso directive, which comes under the brief of another Minister. I am not sure whether the oil refinery comes under that directive. The impact of that directive is something of which we should always be aware. It is not the case at present, but in the event of the downgrading or lack of investment in the oil refinery the implementation of that directive would become an issue. The implementation of that directive in regard to Whitegate oil refinery would have a major impact on the stagnation of development in and around the harbour area. I would welcome clarification on those issues. Tosco must be obligated to ensure that at no stage, because of inadequate investment or changes in policies in regard to the oil refinery, the Seveso directive is implemented in its fullest form as it would stagnate development in Whitegate right across the harbour and down as far as Midleton. When drawing up this contract the officials should examine this issue. Tosco should be obliged to ensure the highest safety standards apply at all times over and above what may be required in terms of normal practice in oil refineries and, more importantly, to ensure that the Seveso directive is not implemented in that area.

I congratulate the Minister and her officials on the negotiations. I hope she will take on board my concerns regarding those issues, particularly the latter one, as I am sure the others are obvious and would be considered in any event. I wish the workers concerned years of oil refining and that in year 2016 there will still be a functioning oil refinery in Whitegate.

Mr. J. O'Keeffe

I confirm to the House that there is major welcome in Bantry for the sale of these assets to Tosco and for the introduction of the Irish National Petroleum Corporation Limited Bill to facilitate that sale. The second major point I want to make is that there will be an even bigger welcome in Bantry when half the moneys that were subsequently axed from the £15 million Bantry package, which I negotiated many years ago, are restored from the proceeds of the sale.

On the question of the sale of these assets to Tosco, I will not focus on the Whitegate refinery – I am speaking not as a Fine Gael Front Bench spokesperson on this area but as the local Deputy from south-west Cork. My principal focus is the Whiddy oil terminal. It is clear the terminal is the major incentive for Tosco to buy both it and the refinery. This terminal is not replicated in many parts of the world and probably is incapable of replication anywhere else at present. It is interesting that it began its life in the 1960s. I was a young lawyer at the time and I can remember the buzz and activity when it was being built, and I made a few bob out of it. It was developed with the idea of the transhipment of oil from Saudi Arabia and places in that part of the world to Whiddy and then the transhipment back in smaller tankers to Rotterdam and other refineries in Europe. It is now proposed that large tankers will come to Whiddy Island and there will be a transhipment of oil onwards to the west, heading for the east coast of the United States, which would not have waters, harbours or the draught to accommodate the super tankers.

Tosco's need is Whiddy's opportunity. The reason I particularly welcome this sale on behalf of west Cork, including Bantry, is that the ter minal was built over 30 years ago and the tank farm is in need of massive investment to update it. The INPC does not have the necessary resources to make that massive investment and under EU regulation the Government cannot probably make that investment. I understand from Tosco that it will make that massive investment. I welcome that. My colleague, Deputy Joe Higgins, who is present would probably complain that it should be done by the State or by a semi-State body. I would welcome it even more if that massive investment was to be made by the State or a semi-State body, but there is no possibility of that. I am delighted Tosco is about to make that massive investment which is necessary because the huge tanks at the terminal would be virtually derelict unless it is made.

This is ideal from the point of view of Bantry, other parts of west Cork and workers at the terminal. I have spoken to them and they are very favourable to the proposal. It is also attractive to the other people concerned who will get a good deal of work from the expansion of the activity at the terminal and the work associated with the tankers. The proposals may involve one tanker coming in per week or every few weeks. A great deal of work will be generated for people associated with that and from the redevelopment of the terminal, which will be a major spin-off for Whiddy, Bantry and west Cork generally. I want to see that and to encourage it in every way possible.

I will not put down a list of restrictive covenants, but I enter one caveat, that the anti-pollution regime should be in place there and strictly enforced. While I want massive investment in this area and this multinational is very welcome into a harbour in my constituency, it must be subject to the most stringent controls that are currently applicable to the INPC and elsewhere. I understand that Tosco is prepared to accept that, but responsibility will rest on the Government to ensure those controls, whether by regulation or through the Bantry Harbour Commission, are in place and, more importantly, are monitored, supervised and enforced. That is very important because there is a major fishing industry and mariculture industry in Bantry and both would be at risk in the event of any major pollution in the bay. That is the first welcome.

The second welcome is for the balance of the Bantry package. In 1986, INPC became responsible for the management of the terminal. If recollection serves, a deal was made involving a sum of $44 million from Chevron, the owners who had succeeded Gulf Oil, and the transfer of the terminal for the nominal sum of £1. The deal also involved giving up the reinstatement clause with regard to the jetty which had been damaged in the Betelgeuse incident in 1979. A total of $44 million accrued to the State. I immediately demanded moneys for Bantry from that settlement.

There were hard negotiations involving the then Taoiseach, Garrett FitzGerald, the then Tánaiste and Minister for Energy, Deputy Spring, and Liam Kavanagh, the Minister for the Environment. The negotiations were long and complicated. They started by offering me £1 million. Eventually I put together a development package for the Bantry Bay area. The package was ultimately agreed, after tough negotiations, at £15 million, payable over four years.

Mrs. O'Rourke

Garrett FitzGerald launched it in Bantry.

Mr. J. O'Keeffe

Yes, the £15 million package was launched in Bantry. I set down the major items to be funded each year from the package. The civil servant who assisted me in drawing up the package, Paddy Teahon, now has another role as chairman of Campus Stadium Ireland.

Mrs. O'Rourke

He is still involved in packages.

Mr. J. O'Keeffe

He was then the assistant secretary in the Department of the Taoiseach and was made available to assist me in drawing up the package. However, that is history.

The package was put in place and the £3.5 million for the first year was paid. The £3.5 million for the second year was included in the Estimates. I secured a Cabinet decision on this because an election was due and I was not sure we would win. Efforts were made after the election to chop that money but they failed because the measures which Paddy Teahon advised me to put in place ensured the funds were untouchable. The first two years of funding brought huge benefits to the Bantry Bay area.

The second two years of funding were chopped by the incoming Fianna Fáil Government. There is £8 million due to Bantry from that package. That is a debt of honour.

Mrs. O'Rourke

Did Fine Gael seek to pay it when it was in Government?

Mr. J. O'Keeffe

I will be relentless in pursuing this issue. This Government will get money again from Whiddy Island. I do not know how much is involved. My only concern is that it is at least £8 million. There is confusion about the figures. There is talk of $100 million less payment of debts and so forth. I understand that complicated negotiations are involved but my only concern, as the west Cork Deputy who negotiated the Bantry package, is that there will be at least £8 million for the State. The first charge on that money is the balance due under the Bantry package. I demand that money on behalf of Bantry and I will continue to demand it until it is paid. That is the mortgage or first charge on the money.

I talked to a number of people in Bantry who outlined the priorities for funding from that £8 million. My colleague mentioned the need for a new pier. The new pier will be necessary in any case due to the extra activity that will inevitably occur in the bay following the take-over of the terminal by Tosco. There were plans in the past to improve the old pier but that is not possible. A proposed new pier has been designed and is costed at £5.5 million. A sum of £2 million is in place and there is a possibility of raising a further £1 million. That is the first demand on the restored Bantry package. It is a necessary and appropriate development to benefit from the moneys generated by the sale of Whiddy Island. The pier will be needed in any event.

The Minister should advise her colleague, the Minister for Finance, that I will tackle him about this. My parliamentary question on this issue was transferred to him so I will talk to him about it next week.

Mrs. O'Rourke

The money has to go straight to him.

Mr. J. O'Keeffe

I want the support of the Minister for Public Enterprise on this issue. This money is due to Bantry. There is a list of other infrastructure development required for the area. A new sewerage scheme is required for Bantry so we should go ahead with it. The water supply is bad, causing water shortages in some parts of the town and outlying areas in the summer. A new ring road is required. These developments will take place in time so the Minister and the Government should face the inevitable. This money is owed to Bantry. The Government chopped it the last time it was due to be paid. More money is coming to the Government now so it should pay that debt of honour.

That is the main point I wish to make on behalf of west Cork. We will watch this sale carefully. According to the Minister, a short time frame is involved and the sale could be completed next month.

Mrs. O'Rourke

In July.

Mr. J. O'Keeffe

Excellent. I will be interested to know when the moneys will be paid over or when the sale is closed, as it were. Usually there is an adjustment or closing account for such things. The Minister referred to complicated debits and credits but I presume they will be finalised on or before 16 July. I will want to see the final account but my interest is the bottom line and that there will be more than £8 million to credit thereafter. I hope the Minister will then announce – she will be welcome in Bantry to make the announcement – that the balance of the Bantry package will be restored.

Mrs. O'Rourke

We will leave that to Deputy McCreevy.

Mr. J. O'Keeffe

I do not mind who does it because the Government will hear about it every day from now on unless it is done. I have given the Minister fair warning. That money is due to Bantry. I will not rest, as the person who negotiated the package, until every last penny is paid to Bantry from the moneys the Minister is getting from this sale.

I will let my colleague, Deputy Stanton, discuss the issues relating to Whitegate. He is from the area and will outline matters of concern to him. My concerns are Whiddy, Bantry and west Cork.

Mr. Stanton

I am happy to have the opportunity to contribute to the Second Stage debate on this Bill. I am a little put out that Second, Committee and Report Stages will be taken tomorrow. That is not the best way to do business. It would have been better to have a break between the different Stages to facilitate discussion and reflection on what is said by Deputies on all sides of the House.

We are disposing of an important asset. In March 1982, the then Minister, Deputy Albert Reynolds, said petroleum products are almost as essential to an economy as food is to an individual. He went on to say that it behoved the Government to guard against the risk that supplies of these products could be interrupted for reasons outside its control. He made those comments when the State was obliged to take over the operation of the refinery. Almost ten years later, Deputy Molloy, who was the relevant Minister at that stage, said in an address to the Institute of Petroleum that there was no room for complacency or "wait and see" attitudes in relation to energy supply and security. He said we could not take it for granted and that it was too easy in times of plenty to question the necessity for efforts and arrangements which had the objective of enhancing security of energy supplies.

In recent years successive Governments and Ministers have recognised the importance of the oil industry to Ireland. We are an island nation. I understand, and the Minister might confirm this, that the supply of refined product in Europe and globally has become rather tight. I understand refineries across the world have closed for various reasons. Therefore, we could be facing a shortage of petroleum product.

There are a number of issues which are of concern. When the mandatory regime disappears, the larger companies will no longer be compelled to take product from Whitegate. What will happen if they decide not to take product from Whitegate but to import it? I understand that was a problem in the past. Could we see a situation where the new owners would say they have no customers for their product and that production will have to be reduced or the facility "moth-balled" or closed? What guarantees has the Minister received and how are they copperfastened to ensure the refinery will be kept in operation for 15 years to the required level? If that does not happen, what can the Minister do? I would like answers to these questions.

I welcome the committee meeting we had recently with officials from the Department and INPC. However, it was unsatisfactory that we had two breaks during the meeting due to votes in the House. We could have spent longer teasing out the issues. All sides benefited from the meeting, but I felt there was unfinished business and that more could have been done. An old hobby-horse of mine is the need for more resources for committees. They can do very valuable work but they are not being resourced. In the past few months they have not even been able to meet. Perhaps the Minister in her role in Cabinet can do something in this regard. We cannot do our business. It would be very regrettable if there was something in this Bill which Deputies should have scrutinised but missed due to the lack of resources for committees.

I mentioned what might happen if large companies decided not to take product from Whitegate. However, there are quite a number of small indigenous Irish companies and I know they have been making representations to the Minister and the Department. They are concerned about their future as some of them are almost totally dependent on Whitegate for supply of refined product. We are speculating, but if at some future date the new owners decide not to supply these small companies, will they have any comeback? Will it result in them going out of business? Would we see a reduction in the number of oil companies selling refined product? Would competition decrease and prices increase? I would like the Minister to address these concerns. I have tabled some amendments on Committee Stage so we can discuss these issues further. In her reply to Second Stage I would like the Minister to give some indication of the safeguards for these companies and her reaction to the representations they have made.

Regarding the deal itself, we have been told it is quite good from the State's point of view. It is also very good from Tosco's point of view. It is getting a state of the art oil refinery which has just benefited from an upgrade costing $100 million. It will be receiving the business debt free as any debts will be taken on by the State. It will have an exclusive contract with the State to store the national oil reserves at Whiddy, which I understand is worth about $8 million or £8 million per annum – I am not sure which. Tosco will have the highly prized asset at Whiddy terminal. I understand that needs upgrading, but it is unique in Europe if not in the world. The company will also have guarantees and indemnities from the State, and I would like the Minister to elaborate further on these. Will they be totally open-ended and exist forever? Will the State be standing over these guarantees right into the future? Deputy Kelleher mentioned 15 years from now, but could we be talking about 100 years from now? We have put forward amendments on Committee Stage so these issues can be discussed further.

Tosco is getting the benefit of commercial contracts negotiated by INPC which are quite valuable. It is also getting ownership of 140 acres of prime agricultural land adjoining the Whitegate refinery. This is probably a good thing as it will leave room for expansion, but this was not really made known until Deputy Michael Ahern asked about it at the committee meeting last week. As a number of Deputies have said, we would like to see the small print. Are there other commitments and aspects to the deal which have not yet been disclosed? This is where a properly resourced committee would be beneficial so we could have the time and backup to examine these issues in detail and to assist the Minister. Our job is to challenge, debate and discuss and not to knock things all the time. We should also be constructive and assist the State in going forward. The issue of the land was never mentioned in answers to parliamentary questions which I tabled.

Mrs. O'Rourke

The Deputy asked quite a few.

Mr. Stanton

I asked quite a number. The other issue is the Tosco-Phillips changeover and the impact that might have. I understand that Phillips, by acquiring Tosco, has changed its entire way of doing business. Up to then I think Phillips was talking about getting out of the refining industry. In one sense I understand why the legislation is being rushed by the Government and INPC, namely, to get in before the deal goes through, but one wonders why it has to be done now with Tosco and why we cannot wait until this other deal has been bedded down between Tosco and Phillips. There are probably good reasons and I would like to hear them.

We will also be turning over the INPC headquarters in Dublin. That is a good deal and it is a good idea that Tosco should have its European headquarters in Dublin. Some people have said to me that this could be the best deal ever for INPC, Whitegate, Whiddy and the country, but we are moving into the unknown and there are uncertainties. In this context it is only right that we raise these questions.

Another issue is the goodwill and the benefit of the business developed, albeit on a subsidised basis, since 1970. The Minister and others have said that this facility in Whitegate, including the workforce, is almost unique. The camaraderie, the sense of teamwork and the pride the workforce has in the operation is worth a lot – I do not think such goodwill could be purchased. The industrial relations record in the facility is second to none – I do not know if there was ever a strike – and the safety record is top class. There have been environmental issues over the years, but they have been very minor. It is like a family and the INPC management and staff are excellent neighbours and I would like to see this continue. I have been told that Tosco will also be aware of the importance of being good neighbours in the local community. This is a very important consideration. There is also a unique road loading facility, which is very important. When it came on stream it generated a lot of extra traffic on the roads.

Debate adjourned.