John Browne (Wexford, Fianna Fail) | Oireachtas source

I welcome the opportunity to contribute to this debate. We are all in favour of developing the natural resources of Ireland to their full potential so that the Irish people will benefit. I spent a year in the Department of which Deputy Rabbitte is the Minister. I was lashed on many occasions because we were giving away all our money and our resources to outside companies when at that time there was very little exploration and it was very difficult to attract exploration companies to the country. I was in the Department with Dermot Ahern when the Corrib field was opened. We have seen the length of time it has taken to attempt to bring that oil ashore, but it still has not happened. Hopefully, there will be a change which will be of benefit to the Irish people in the future.

Any development of petroleum resources in Ireland must benefit the Irish people. It is important that any policy development in this area balances the maximisation of State revenue with incentivising offshore oil and gas exploration. I welcome this detailed report and I commend the committee on the time and effort expended on it. The committee interviewed those involved in the oil exploration business and communicated with other countries where oil exploration has been successful. The report's recommendations are to be welcomed, particularly the proposed new tax regime. However, caution must be exercised in any desire to change taxation on exploration efforts, given the limited success of exploration in Ireland's jurisdiction since 1970.

The Joint Committee on Communications, Natural Resources and Agriculture published a significant report on offshore oil and gas finds in Irish coastal waters with recommendations including a substantial increase in the tax take from any future licences. The committee makes several proposals for the oil and gas exploration sector. In particular, the report calls for a more transparent system of licensing and public consultation while also recommending regular reviews of fiscal and licensing terms.

People in the wider community were concerned that the Department and the oil exploration companies operated in secrecy. It is very important, therefore, to have a more transparent system for the future so that all oil exploration opportunities are made public and fully explained to the people. I hear all the rumours about large gas and oil finds off Tuskar, Hook Head, Carnsore Point and many areas along the south-east coast. Much of this is probably fiction and some may be reality. Documents recently released by exploration companies gave the opinion that we would have oil in Kilmore overnight and thousands of jobs in the south east. We all know that this is not going to happen, and it will be a long drawn-out exploration to find a viable oil or gas field.

The report recommends that a simple and transparent system should be implemented through a review of the Petroleum and Other Minerals Act 1960. The first recommendation is that good basic law should underpin policy principles relating to Ireland's petroleum resources. The report recommends that the Petroleum and Other Minerals Act 1960 be reviewed. The report notes that a policy should be developed in such a way to maximise the take for the State and its citizens while at the same time being sensitive to the local needs in the host community. This is a very important point as in the past, matters may not have been handled initially as they should have been, as in the case of the Corrib field. More dialogue and discussion and less political play-acting would have been more appropriate. We need to learn the lessons for the future and take into consideration the concerns of the local communities if exploration opportunities are developed in the future.

The report referred to retrospective changes to fiscal and licensing terms which would risk long-term reputational damage. It is very difficult to look at things retrospectively and it is preferable to plan for the future. The committee recommendations include that tax revenue should be a minimum of 40% as opposed to the current corporation tax rate for exploration of 25%. This change should take place across a sliding scale up to 80%. The committee also noted that any future changes to the fiscal terms should be clarified before subsequent licensing rounds, to ensure certainty around the regime for the investing companies.

The report is very detailed and comprehensive. I am sure the Minister will take many of the suggestions on board. The current oil and diesel prices on the world market have substantially decreased but that does not seem to be reflected in the price at the pumps. The price has decreased a certain amount but not significantly compared to the world spot prices over recent months. I worked in the oil business for 15 years before I came to this House.

When oil prices increase on the world market, Irish oil companies are very inclined to increase prices immediately but when they decrease, they are very slow in reducing them. Not many oil companies are operating in Ireland and this affects the supply scale. It is very difficult to take on the companies but there should certainly be a more significant decrease in the price of diesel and petrol at the pumps at present. Obviously, that is not happening.

I welcome the report as it gives us an opportunity to debate. It also gives us an opportunity to explain to the people that there is not a great influx of exploration companies seeking licences and claiming there is a great opportunity in this country. Exploration companies have a very slow, tedious approach. Unless exploration is viable, companies pull out very quickly. Ultimately, if there is to be successful exploration in the country, the people ought to benefit substantially. I ask the Minister to comment on the price of oil, petrol and diesel.

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