Fergus O'Dowd (Louth, Fine Gael) | Oireachtas source

I thank both Deputies for putting this matter before the House for debate. It is an important and current debate and I wish to refer to some of the facts. The first fact obviously is that were oil to be discovered off the Kerry coast or off any other part of the coast, it would indeed be good news. I can confirm for Members that there has not, as yet, been a discovery of oil off the Kerry coast and the last time an exploration well was drilled in this area was more than a decade ago in 2001. Unfortunately, that well was dry. On a more positive note, I can inform Members that planning for an exploration well in 2013 on the Dunquin prospect is being advanced. There has been quite a deal of media coverage on the topic of oil and gas exploration in recent months, including some articles about potential major fields. In some instances, these articles have related to exploration authorisations where the holders have yet to commit to exploration drilling or even to acquiring new seismic data. Forecasts made in such circumstances must be put into perspective. In order for a discovery to be made, there must first be exploration drilling and such drilling in the Atlantic is expensive and involves a high financial risk.

Over the past decade, there has only been an average of a single exploration well per year. In recent years, however, there has been an increase in the number of exploration authorisations granted in the Irish offshore area. In the coming years, this should result in an increase in exploration activity and in exploration drilling in particular. As a consequence of the current low level of drilling activity, there are no offshore drilling rigs permanently based in Ireland. While the current level of exploration activity provides some employment opportunities in ancillary supply and support services, along with specialist port services, there is unlikely to be a substantial oil industry based in Ireland until there is a much higher level of exploration drilling in Ireland's offshore areas. Not alone has drilling activity been low, but it does not all occur in one area and this has implications in terms of anticipating where support services should be located. Clearly, a drilling rig off the coast of County Donegal is likely to be supported from a different port to a drilling rig off the County Kerry coast.

Ireland has a clear policy of actively encouraging investment in oil and gas in order that we can enjoy both economic and energy security. A reasonable increase in exploration activity levels resulting in further commercial discoveries of oil and gas certainly would result in increased employment and economic activity generally. It also would result in significant financial benefits to the State from the higher rate of corporation tax that applies to profits from production of oil or gas. For the present, however, one must remain realistic regarding both the pace and nature of the exploration effort.

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