asked the Minister for Industry and Commerce if any factual assessment has been made of the oil and gas deposits off the east coast; and, if so, the prospects.
Ceisteanna——Questions. Oral Answers. - Oil and Gas Deposits.
168.
Seismic surveys have been carried out off the east coast both by non-exclusive petroleum prospecting licence holders and by the only company holding an exclusive exploration licence. While these surveys have identified some geological structures of possible prospective interest, it will not be possible to assess fully the prospects of the area until exploratory drilling is carried out.
I wish to put a simple question to the Minister. Last weekend there was a report in the newspapers that was supposed to be a policy statement in regard to oil and gas exploration. Can the Minister say what exactly is Government policy in respect of such exploration.
This has nothing to do with the question that was asked.
Question Nos. 168 and 169 are related. In his statement the Minister made nothing clear to anybody.
The Deputy is endeavouring to overrule the Chair. He must obey the ruling of the Chair.
The statement issued by the Minister conveyed nothing to any of us and that is why I am asking him to make a statement now as to what the policy is in regard to exploration.
The question on the Order Paper is not concerned with statements that appear in the newspapers. I am calling Question No. 169.
Can the Minister say what is the policy in regard to oil and gas exploration.
Question No. 169, please.
The Chair is protecting the Minister.
The Deputy has made a charge against the Chair. Either he will withdraw that charge or withdraw from the House.
I am making that charge. I have asked a straightforward question of the Minister.
If the Deputy will not withdraw the statement, I must ask him to withdraw from the House.
I know you very well, a Leas-Cheann Comhairle, and I withdraw my statement. However I consider myself to have been let down by the Minister in his not answering my question.
The Chair takes it that the Deputy has withdrawn the statement.
The statement is withdrawn.
169.
asked the Minister for Industry and Commerce if he will make a statement on the present position of oil and gas exploration off the south coast; the present information available to his Department regarding any such finds; how this information has been obtained by his Department; his policy in relation to such finds; and his future plans in this regard.
As already announced, the company which hold an exclusive exploration licence in respect of an area off the south coast has reported a natural gas find about 30 miles from the Old Head of Kinsale. The find, which is estimated to contain reserves of about one million million cubic feet of natural gas, is modest by North Sea standards. It has been decided that the gas should be allocated partly to NET, for the production of ammonia for fertilisers, and partly to the ESB. Discussions between the company and these two bodies are at present in progress.
In June of this year exploration in the same general area revealed shows of oil and further drilling and testing are being carried out in order to determine the significance of this development.
Under the terms of the prospecting and exploration licences and petroleum leases, full information regarding the progress of operations and results therefrom must be furnished to my Department by the licensees and lessees.
Plans in regard to the development of future finds of gas or oil would depend on many factors including the location and size of the deposit and the type of gas or oil concerned.
Will the Minister make a positive statement as to what is Government policy in relation to gas and oil research off the southwest coast and will he say what conditions he will impose on exploration companies? Will it be another case of what happened in relation to mining—50 per cent equity and 45 per cent of the profit—or will the Minister endeavour to encourage the international groups to find the oil and gas which, apparently, lie off the southwest coast?
The Deputy, perhaps, used the word "research" unintentionally because the question of research does not arise in this area so far as the Government are concerned. Regarding the matter of the details of the terms, I have indicated that I hope to make these public by the end of the year. The Deputy will appreciate that we are talking of an area in respect of which many countries during many decades have made serious mistakes; that we have had a very intensive period of watching the experience of other countries and of seeking advice of consultants and experts from many countries. In this complex area we will have the details for the companies but more important, for this House, before the end of the year. I do not think that in a matter of great complexity such as this, the Deputy would expect me to give those details in reply to a supplementary. In any case, I have not got the details with me.
Regarding the matter of the attitude to exploration, I have made it clear, and I am happy to have this opportunity to reiterate it, that the great companies through their expertise, financial strength and marketing know-how have a valuable place in the development of our Continental Shelf. The task is one of going to neither extreme, of not giving them total control and of not having nationalisation at the other pole but finding a balance that ensures sufficient interest on their part to participate and of getting the nation's interest so represented as to ensure that we get the maximum benefit. That is a delicate balance and one that is not easy to find.
Regarding the last sentence or two of the Minister's reply to the original question, are we to take it that his intention is that the terms to be applied in the case of any lease will be decided in relation to each case, on the merits of each case, as distinct from an overall decision on a level of return?
I do not wish to anticipate the details but if the Deputy is familiar with what is normal practice in many countries he will know that in the case of a very small find which is only marginally profitable, if at all profitable, it is prudent that the off-take of public money should be very little. In terms of a very large find it is prudent, where the unit costs decline very much and the rate of profit increases, that the contribution to State coffers should be large. In other words, the norm is a graduated scheme depending on the closeness of the field to shore, depending on the depth of the water, if it is in the sea, depending on the size of the field and on the quality of the oil or gas as well as a number of other variables.
The recognition of those variables is built in uniformally to the sort of arrangement that is made with the companies. I am trying rapidly to think over the countries with which I am familiar but never to my knowledge has there been a simple across-the-board non-variable sort of contract between State and private development.
It was in recognition of that fact that I asked the question. The Minister said earlier that it was intended to announce the details before the end of the year.
I am informed that we can keep to that timetable.
That statement prompted my question. In what way does the Minister propose to announce the details having regard to the fact that there will have to be, as he said, some variations relating to almost every case?
In relation to the delay in reaching a number of decisions in regard to exploration generally——
I do not accept that there have been delays. I do not think that the Deputy is in any position to throw stones in that direction because I inherited a bare slate with no development work whatsoever done. I could well have had a little work to inherit so that I could have moved more quickly but I regret that that was not the case.
Since the Minister chose to interrupt my supplementary I may reply by telling him that there is nothing that could not be done in 24 hours to give the necessary fillip to the economy, which is so much needed at present. Has the Minister read the statement the vice-president of the Continental Illinois Bank of Chicago made in Scotland the day before yesterday in which he pointed out, in relation to a small gas find there, that American business has moved in to the extent of 200 manufacturers and £500 million worth of American investment giving the economy in Scotland a complete uplift, which we are sorely in need of at present?
The remaining questions will appear on next Thursday's Order Paper except for those which Deputies may wish to obtain from the General Office.