Paudge Connolly (Cavan-Monaghan, Independent)

I propose to share time with Deputies Gregory and Joe Higgins. I welcome the opportunity to speak in this debate, which affects the entire country, both land and sea. In my constituency of Cavan-Monaghan we have our own natural reserve of gold.

Regrettably, there is a sad history to our exploration rights and how we, effectively, gave them away. In 1967 we sold the exploration rights of shallow water finds of oil and gas for a princely sum of €625 to a company called Marathon Oil. All companies seeking to take up the current round of licences must sublet them from Marathon Oil, which is based in Texas. I do not know what we can do about having sold the rights and almost given them away some years ago, but we should be fit to look at the terms and conditions under which companies operate.

At that stage it was envisaged the companies would pay 50% tax on the finds and the country would automatically inherit 50% of the shareholding of the find, along with 6% or 7% of the royalties. That struck me as a fairly good deal which the country could benefit from. It would also benefit from the spin-off industries associated with any such find.

In 1985, the terms and conditions were modified and a sliding scale of royalties was put in place. Perhaps this was the beginning of where we find ourselves today. In 1984, a gentleman called Denis Thatcher who had an interest in a company called Enterprise, was among a group which lobbied the Government. Shortly afterwards, the oil company succeeded in making the royalties disappear, in a move which went against senior departmental advice. The agreements were abandoned and the 50% stake disappeared. This was a giveaway of our natural resources. One would have to ask what happened in 1984 and the three following years. Why did the Government go against departmental advice? This was where the rot set in, and we should examine the issue again.

In the early 1990s, the tax take on the oil was reduced to 25%. However, the companies could write off this 25% against investments made in previous years and money spent in waters which were not Irish. We had given away any interest or benefit we would have as taxpayers. We also had the matter of frontier licences that were introduced. They allowed oil companies to hold licences for a long period, perhaps 20 years. The companies could sit on the licences and watch world market trends in oil prices. Along with 100% write-offs, this left Ireland in a very vulnerable position to be plundered. Even with a tax take of 25%, Ireland had the lowest rate of its kind in the world. We are giving away many of our resources.

See this speech in context