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Dáil Éireann díospóireacht -
Tuesday, 19 Nov 2002

Vol. 557 No. 4

Other Questions. - Offshore Exploration.

Eamon Gilmore

Ceist:

74 Mr. Gilmore asked the Minister for Communications, Marine and Natural Resources the response he has received to the new initiative announced by him on 16 September 2002 aimed at increasing offshore oil and gas exploration; and if he will make a statement on the matter. [22339/02]

The Deputy will be aware that the licensing initiative announced by me on 16 September last indicated that details of the licensing process and the conditions applicable to successful applicants would be provided last month. In fact, the details were released on Wednesday, 6 November, less than two weeks ago, and indications are that the companies in the industry are still studying the details and considering them in the context of their business plans. The main details are that the area under the initiative is being made available for licensing in four distinct tranches and that the schedule for closing dates for applications is as follows:

Tranche

1

15 March 2003

2 (and 1)

15 October 2003

3 (and 1 and 2)

15 March 2004

4 (and 1, 2 and 3)

15 October 2004

The Deputy will understand that it is too early to know what the response will be in terms of full applications for exploration.

Last week or the previous week the small Scottish-American company Ramco – for a while I thought the company's name was Rambo, which would have tied in with comments made by Deputy Ferris on the licensing changes made by the former Deputy, Ray Burke, in the mid 1980s – which took over the Seven Heads field, immediately sold on a large tranche of gas, about 30% of the field, for almost €700 million to a German company, Innogy, which I presume will be competing with Bord Gáis. Do the Ministers believe there are any lessons to be learned from that experience in that smaller energy companies like Ramco, which operate in Scotland and elsewhere, might be the ones we should encourage to come here? Will the Minister of State agree, however, that the general point made by my colleague earlier, that the situation in relation to exploration licences—

I remind the Deputy that supplementary questions are limited to one minute.

It appears to the ordinary citizen that because of the 20 year timeframe, the fact that we do not get any revenue from this deal and that we have lost many jobs and opportunities, particularly to Scotland, that this is devastating—

The Deputy has gone way over the time.

Will the Minister of State agree, based on what happened last week although I realise only one well was drilled in the last season, that we need to give serious consideration to the exploration regime because many engineers are telling us that the new technology for deep water exploration means that this country could be another Norway—

The Deputy has used up almost two minutes.

It is a very important point, a Leas-Cheann Comhairle—

I know but there are rules, Deputy.

—and I would like the two Ministers to start on a good footing in this area.

On the same issue, I welcome what is happening in the Seven Heads gas field off the Cork coast. It means that the old Kinsale gas field will continue to be viable for the next ten years, which is very welcome. I congratulate the Minister on his involvement in that process.

On the question raised by Deputies Ferris and Broughan, is the Minister satisfied that the balance is right between ensuring we have a suitable environment to attract drilling companies into our waters to drill for oil and gas and ensuring that when it is found, we will get a sufficiently good deal for the State in terms of royalties and tax returns from those finds?

We do not get anything. We do not get royalties.

We get tax returns. The Deputy is correct when he says we do not get royalties but we get 20% corporation tax in relation to it. Is the Minister satisfied with the current balance or does he have any plans to change it?

At the outset I must say I am surprised by the attitude taken by Deputy Broughan because the Ramco development is a positive one which will extend to the Kinsale Head gas field for a significant number of years. There is always a question about balance but from dealing with companies such as Ramco, unions, etc., we believe the balance is reasonably correct but there is always room for review.

On the question of the tax returns, there will be significant tax returns from the Ramco development. The fact that it had a market for the gas and was able to sell it on is a positive development when one considers that the energy import dependence ratio now stands at over 80%, which is 30% higher than any other country in the European Union. We have to examine the possibility of exploration and encouraging companies like Ramco to come here while also taking into account the points raised by Deputies Ferris and Broughan. The balance in relation to work, goods and service and all of that area will continue to be taken on board by the Government.

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