Michael McCarthy (Cork South West, Labour)

I welcome the opportunity to speak on this evening's motion, particularly given the role of south-west Cork in previous years in proving to be a successful base for commercial gas discoveries in this country.

In over 40 years drilling in Ireland, there have only been four commercial discoveries in total. Three out of these four discoveries were in the gas fields off Kinsale. This had the net effect of creating jobs for people and improving the local economy.

I welcome the fact Sinn Féin is moving this motion because it is important we have a robust and pragmatic debate on the future of oil and gas exploration in Ireland. There is a need to increase the level of exploration activity and to deepen our knowledge of the petroleum potential of the Irish offshore.

There is, however, also a need to be honest with people and suggestions by Sinn Féin that there are vast reserves of oil and gas potentially worth €700 billion, which Sinn Féin claims as justification for the imposition of a 50% on oil and gas profits, are completely at variance with reality.

Sinn Féin should no longer be allowed to propagate this myth. The party's arguments are unrealistic and misleading, and ignore some basic but important facts, including the reality that the petroleum potential of the Irish offshore is largely unproven. Reports that Ireland has a reserve potential of 10 billion barrels of oil relate to potential reserves only. The truth of the matter is that Ireland's proven reserves are only a fraction of 1 billion barrels. The actual reserves will not be known without a dramatic increase in the level of exploration drilling. The cost of exploring offshore Ireland is prohibitive due to the remoteness and water depth of our jurisdiction. To drill a single deep water well in the Atlantic can cost more than €100 million. We have limited infrastructure in terms of pipelines, termini and platforms that further push up the cost of development, which in turn adversely affects the commercial viability of small and marginal gas and oil discoveries.

There have been only four commercial discoveries in 40 years of drilling in this country. This compares with 300 commercial discoveries in Britain, primarily in the North Sea. Sinn Féin's tendency to pitch our circumstances against those in Britain or Norway is as insincere an approach as is possible. It is completely out of sync with the facts of the situation.

Last night, in an eloquent rebuttal of the motion, the Minister for Energy and Communications put forward clear and convincing explanations for the rationale underpinning Ireland's tax terms for oil and gas production. By contrast, it was disconcerting to see Deputies from Sinn Féin constantly referring to countries like Norway and Britain having a higher petroleum tax rate than Ireland. There comparisons are wholly inappropriate and do not stand up in terms of comparing like with like.

See this speech in context