Noel Dempsey (Meath, Fianna Fail)

I have stated all along that the community in the immediate vicinity of the pipeline and the terminal should benefit from any gas find. I have believed for a long time that where people are discommoded by a development in the national interest they should gain locally, and that includes those near the pipeline. Unfortunately, no one can gain from it until the gas is piped ashore, which has been a difficulty in the Corrib area.

I agree a local community, wider region and nation should benefit from any gas or oil exploration success. That is Government policy. Where Deputy Cowley and I differ is in what he might demand or feel is reasonable in that context. Our disagreement is a matter of figures rather than principle.

At present, the corporation tax rate of 25% applies to finds, with a 100% write-off of historic capital costs. That was deemed necessary when it was put in place between 1987 and 1992, particularly in the Finance Act 1992. Despite what Deputy Cowley previously described as generous terms — I agree they are generous — we have received few responses. We must keep exploration attractive and not put people off by taking too much. Circumstances have fundamentally changed, particularly with the rise in prices of oil and gas during the past 18 months to two years. This enables us to review and revise the terms to ensure the State and taxpayers benefit more from future finds without scaring companies away.

We must remember 25% or 50% of nothing is nothing. If we do not attract exploration companies, the State itself must carry out that exploration. I recently spoke to someone who knows about these matters. Regarding the area off the west coast of Ireland, the usual cost for an exploration well is €20 million but it is estimated it will cost €70 million in some places. We must maintain a balance in the terms to make it attractive to prospectors. However, we are reviewing the terms and we will seek a greater take.

If, as I hope and as seems to be the case, greater prospectivity occurs and we have more discoveries, we will be in a much stronger position to increase the terms. I have spoken to experts who are not directly associated with oil exploration companies and who have conducted negotiations for other countries. They state if companies believe they have a good chance of finding oil and gas, they do not mind the terms increasing or the State's take being larger so long as they know they have a return.

I do not want to rake over old sores, but in the case of the Corrib, the costs have doubled during the past two years while the company is waiting to bring the gas ashore. The price has gone up so it is balanced to a certain extent. However, we must progress the issue.

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