Dáil Éireann díospóireacht -
Wednesday, 29 Jan 2003

Vol. 560 No. 1

Written Answers. - Oil Reserves.

Jim O'Keeffe

Ceist:

160 Mr. J. O'Keeffe asked the Minister for Communications, Marine and Natural Resources if his attention has been drawn to the fact that there are three million barrels of spare capacity in the Whiddy oil refinery; and if, in view of the likely shortage of oil in the event of war in Iraq, he will enter into discussions with the owners with a view to having full capacity filled and thereby increase national oil reserves held in Ireland by a further 21 days supply. [1838/03]

Minister for Communications, Marine and Natural Resources (Mr. D. Ahern)

Since the establishment of the National Oil Reserves Agency, NORA, in 1995, strategic storage of oil has been a matter for the agency rather than the private sector. As part of its overall arrangements to manage and develop Irelands strategic stocks, NORA has a contract with the owner of the Whiddy Island terminal to store 500,000 tonnes of oil products there, involving seven tanks or half of the terminals total capacity. With the recent acquisition by the agency of approximately 130,000 tonnes of kerosene, NORAs contracted capacity at Whiddy is now fully utilised and I understand that the agency has no immediate plans to extend its holdings at the terminal. Indeed I am conscious that if NORA was to increase its share of capacity utilisation at the terminal this could impair opportunities for developing any commercial activity there.

Assuming that the terminal was in a position to make the additional tanks available to NORA, I am advised that the quantities of oil products required to fill them would cost the agency approximately $20 million per tank at today's high prices, before taking account of the associated storage costs. This would come on top of commitments amounting to approximately $35 million by NORA in recent months which have helped to boost Ireland's emergency reserves, which comprise both industry and strategic stocks, to the equivalent of more than 120 days of imports, a record total well in excess of the 90-day reserve required to fulfil our international obligations. If, contrary to the consensus among industry observers, a major oil shortage were to occur as a result of events in Iraq, the internationally-coordinated response would involve eking out these emergency stocks so as to provide effective cover well in excess of their nominal duration.

NORA will continue to monitor oil product and storage markets to identify cost-effective opportunities for improving Irelands overall oil reserves. However, in view of the very high level of comfort provided by our current emergency stocks, whether held at home or abroad, and NORA's existing commitments in servicing the strategic stocks it has already acquired, it is unlikely that it could justify the level of expenditure necessary to provide the additional cover suggested by the Deputy.