Vol. 178 No. 6
I move:—
"That it is expedient to authorise such payments out of moneys provided by the Oireachtas as are necessary to give effect to any Act of the present session to vest in the Minister for Industry and Commerce all property in petroleum existing in its natural condition in strata, to make further and better provision for the working and development of such petroleum, to amend the Minerals Development Act, 1940, and to provide for certain other matters connected with the matters aforesaid."
As I understood the Minister's speech on the Second Reading, it is proposed, when this measure is enacted, to enter into an agreement with an American company known as Ambassador Oil. Could he say what is the proposed capital of the new company and also what expenditure it is anticipated will be incurred by the Company in exploratory work over, say, the next two or three years? Could he also give the House any indication of the area or areas in the country where it is proposed to explore with a view to ascertaining whether oil deposits exist or not?
Perhaps when the Minister is dealing with that he could also furnish us with some information on a matter into which he said he proposed to look when we were on the Second Stage of the Bill. I would put my inquiry in this form: is there any provision in this Money Resolution to finance some kind of guarantee fund to provide against the contingency of somebody entering on a landowner's land under the Minister's warrant and doing depredation there in the course of seeking for oil, then leaving the person's land and announcing that he has no resources wherewith to pay him such compensation as an arbitrator might award? As the Minister knows, under the amending legislation at present in operation, there does not appear to be any provision of that kind and I think the Minister said he would consider the question of establishing some kind of guarantee fund to which the ordinary citizen could have recourse if the exploring company found itself unable to meet an arbitrator's award for damage done.
In reply to Deputy Cosgrave, the proposed capital has not yet been settled but it is anticipated that there will be largely loan capital in the capital formation of the company. As far as the amount to be expended by the company is concerned, that is set out in the agreement. The Deputy will remember that there are four separate periods in respect of which the company will enter into an obligation to explore and expend certain moneys and on failure to expend which they will forfeit a certain amount of these moneys to the Minister for Industry and Commerce. In respect of the first three years of the first five-year period; for example, they will be obliged to spend at least $300,000 on exploration and to drill at least one well to a depth of 5,000 feet. If they fail to meet these terms of their obligation they will be obliged to forfeit to the Minister the unexpended portion of the sum of $300,000; similarly with other periods of five years, having regard to the cumulative expenditure, in so far as they fail in any period to expend the moneys they undertook to expend, they will have to forfeit the unexpended portion of them to the Minister. I do not think it necessary to give the details of the expenditure over each five year period at this stage.
As to the point made by Deputy Dillon, I did in fact have regard to the suggestion he made and have put it in the form of an amendment. However, the amendment which I framed is not as he has put it forward to-day. He suggested on the last occasion that some examination of the bona fides of the financial background of the company to whom rights would be given might be undertaken and I have ensured in the amendment I shall propose later on that the Minister must be satisfied as to the financial background of the company undertaking exploration before any necessary licences or permits are given. I have not put it in the form suggested, that is, to set up a contingency fund but I am sure, having come to the amendment, the Deputy will agree I have met his case reasonably well.
Can the Minister say if the company which proposes to operate here is a wholly-owned subsidiary of Ambassador Oil?
That is the intention.
What does the Minister mean by largely loan capital?
That is the formation of the company at the present time and we expect they will use the same kind of capital formation in their wholly-owned subsidiary here.
I do not understand what loan capital means. Does it mean issue of shares or does it mean preference shares or debentures?
It means loans advanced by the United States interests in the parent company.
