Joe Costello (Dublin Central, Labour)
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Question 6: To ask the Minister for Communications, Marine and Natural Resources if he will report on the recent frontier Slyne-Erris-Donegal licensing round; his views on reviewing the current terms for the exploration and exploitation of natural resources here; and if he will make a statement on the matter. [13610/06]

John Browne (Wexford, Fianna Fail)
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Five applications were received for frontier exploration licences in the recent Slyne-Erris-Donegal licensing round which closed on 15 March. These applications were from Statoil Exploration (Ireland) Limited with Shell E. & P. Ireland Limited as a partner, Serica Energy (UK) Limited, Grianan Energy Limited and two applications from Island Oil & Gas plc with Lundin Exploration BV and Endeavour Energy (UK) Limited as partners. A total of six full blocks and ten part-blocks were applied for under the licensing round. These applications are being considered by officials of the Department. Awards of licences are not expected to be announced until early June.

The Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, and I are pleased with the response to this licensing round and hope that it will, in time, lead to new petroleum discoveries. In Ireland, we import 80% of our natural gas requirements and 100% of our oil requirements. It is therefore extremely important that we try to reduce or eliminate this high level of dependency on petroleum imports. For that reason we need to continue promoting and encouraging petroleum exploration in Ireland.

Ireland's terms are kept under constant review by the Department in light of the international market in which Ireland seeks to attract exploration companies. Ireland has yet to make the breakthrough needed to establish its prospectivity. The awards to be made under the current round will be issued under the 1992 licensing terms. When this round has been completed, the Minister, Deputy Noel Dempsey, will turn his attention to the question of whether the 1992 licensing terms remain appropriate in this age of high gas and oil prices and the emerging tight supply position in Europe.

Tommy Broughan (Dublin North East, Labour)
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The Minister, Deputy Noel Dempsey, told us last autumn that he was considering re-examining the licensing terms for our oil and gas reserves. We have not heard a word from him since. During the earlier discussion today, I thought we should do an audit of how much taxpayers' money the Minister, Deputy Noel Dempsey, has lost. I mentioned the voting machines and the climate levies. Perhaps we also have serious possible losses to the Exchequer from his dilatory behaviour on these licences.

I welcome the five licences to which the Minister of State referred. Looking at our frontier territory, I notice that two thirds of the blocks in the north-west have yet to be awarded. As any oil and gas found belongs to companies which only pay 25% corporation tax, it leads to the possibility of grave losses for this country. The companies do not even have to land the oil here. The 1992 licensing terms are extremely generous.

Approximately one year ago, the Minister gave Providence Resources and Sosina Exploration an exclusive licence to explore and exploit the so-called "Dunquin" area off the south-west coast. The great Dr. — or Sir — A. J. F. O'Reilly has a 7% interest in those companies, which one of his journalists estimated may now be worth €20 billion. Those companies simply transferred 80% share in the licence to ExxonMobil. Why could the Minister, Deputy Dempsey, not have done that? Why could he not have made an arrangement from the start to get the maximum possible benefit for the people with the larger exploration company?

The real point of the Slyne-Erris concession is that once again we are sleep-walking and giving away vital resources and reserves from the people. I brought forward a Bill on behalf of the Labour Party, which would include an annual report to Parliament, such as the climate report requested by our Green Party colleagues, to keep terms constantly under review.

My great predecessor, Justin Keating, instituted a much fairer regime in the 1970s, which the Minister of State's Government and predecessors wrecked and left us in the helpless free-for-all situation we now have. It is time we had urgent reform of Irish offshore licensing in the best interests of the country. This week Forfás stated we have a dangerous oil dependency, are addicted to oil and the country is vulnerable until our renewable energy sources are brought up to scratch. We must take care of our indigenous resources.

John Browne (Wexford, Fianna Fail)
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I should have included in the reply that a strategic environment assessment is being undertaken for the Slyne-Erris-Donegal basins. The result of this will be known by early April. However, it is subject to a public consultation process during April and May and no licence will be awarded until after this time.

Regarding a review, the Deputy will be pleased to know that the Minister, Deputy Noel Dempsey, has agreed to have a review in the Department, which is under way. Ireland has yet to establish itself as a petroleum province. The details for the Slyne-Erris-Donegal round state that licences will be issued under the 1992 licensing terms. The Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, requested that a thorough and comprehensive review of licence terms be completed as quickly as possible, and work is progressing on this review. He will engage consultants to participate in this process to ensure an independent perspective on work completed to date in the review, and to consider the overall terms.

Bernard Durkan (Kildare North, Fine Gael)
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Have lessons been learned from previous exploration experiences, for instance in respect of the development of the Corrib gas field? If so, will those lessons be applied in current and future exploration? To what extent are the Minister of State and his Department satisfied that some changes are necessary?

John Browne (Wexford, Fianna Fail)
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Deputy Broughan made the point this morning that we need to be sensitive in making decisions and to take into account people living in the area. In respect of the Slyne-Erris-Donegal round, a strategic environmental assessment is under way which will go to public consultation before licences are issued. I worked in this Department in the past and saw that companies are not in any great rush to get involved in exploration — there was no interest in one of the previous rounds.

Tommy Broughan (Dublin North East, Labour)
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The Minister of State was on the rigs. He saw the flows.

John Browne (Wexford, Fianna Fail)
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At that time I met the union and had several discussions about reviewing the terms. I am pleased that the Minister has decided to carry out a comprehensive review and to involve consultants to ensure an independent point of view, although sometimes we complain about consultants.

Eamon Ryan (Dublin South, Green Party)
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Is it possible to include a condition in the licensing arrangement that any oil or gas found would be landed and processed in Ireland, or is it possible that someone could discover oil or gas in our waters and process and land it elsewhere?

John Browne (Wexford, Fianna Fail)
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I take the Deputy's point and will put it to the officials to see if it is being considered in the review which covers all issues.

Seán Crowe (Dublin South West, Sinn Fein)
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If the uptake is so poor why is the gas or oil not left in the ground, given that it is of no benefit to us? Were no lessons learnt about the individuals involved in negotiations on behalf of the State? Part of the problem regarding the Corrib gas line may have been that certain individuals had their own interests at heart, rather than those of the State. What is the benefit in giving away an asset for the benefit of private companies if the Irish people will not benefit? There are very few jobs in this area so the Minister of State cannot use employment as an excuse.

John Browne (Wexford, Fianna Fail)
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I do not accept that leaving the oil or gas in the ground is the answer. The cost benefit analyses in respect of the Corrib gas line found it would be important to bring the gas ashore. That would create many jobs but as Members said this morning, if we bring it ashore we need to take account of the sensitivities involved. We need to learn lessons from what has happened and make decisions based on what is before us. We also need to take into account the importance of finding gas and oil at a time when we import 100% of our oil and 70% of our gas.