Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Question 2: To ask the Minister for Communications; Energy and Natural Resources his views on the report on offshore oil and gas exploration approved by the Joint Oireachtas Committee; and if he will make a statement on the matter. [22132/12]

Pat Rabbitte (Dublin South West, Labour)
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The Deputy will be aware that neither I nor the Minister of State, Deputy Fergus O'Dowd, has received the report on offshore oil and gas exploration from the Joint Oireachtas Committee on Communications, Natural Resources and Agriculture. I understand the committee has engaged with the subject matter of this report for more than six months and over that time has invited a range of parties to give evidence before it. My Department made a presentation to the committee in September last and has provided additional material since then to assist the committee in its work.

I understand the committee's report is due to be published shortly and I look forward to receiving a copy as soon as it is available. I can assure the Deputy that I will be happy to discuss the report and its recommendations as soon as I have the opportunity to read and consider the report in detail.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I thank the Minister for the response. The report will be published next Wednesday. As the Minister stated in his response, in recent months the committee met representatives of different sectors in regard to offshore exploration. While my party may have a more radical view, the Minister will find there is an element of compromise in the report on the part of all concerned for the greater good. The report will be in advance of where we are now but it will be taken in the light of trying to get a better return for our resources. While many arguments were made in the past regarding incentives and so forth, we are at a stage now where the exploration project is in a far better place than it was some years ago. There is a good deal more interest, particularly in regard to security and so forth. Will the Minister give an undertaking that he will come back to the House and debate the report with us? Will he acknowledge that the report is an all-party report by a committee, the majority of whose members are Government TDs and Senators and that it was unanimously supported and adopted by the members of the committee?

Pat Rabbitte (Dublin South West, Labour)
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I acknowledge that it is an all-party report. I acknowledge also the seriousness with which the members of the committee went about their work. I am aware of some of the submissions made to the committee. I understand from the Chairman that it is a report of some merit and if Deputy Ferris says it will be published next Wednesday, I welcome that. I assure the Deputy that it will be taken very seriously in this Department. If it is his wish that the Oireachtas committee report be debated in the House, I am happy to see that matter decided by the Whips. The Minister of State, Deputy O'Dowd, and myself will be glad to participate in that debate.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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When the Minister was on this side of the House he would have known that many reports commissioned and produced by various committees were left on the shelf. I hope he will give an undertaking that once we debate this report he will proactively implement its recommendations.

Pat Rabbitte (Dublin South West, Labour)
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I am happy to commit to having a debate on the report in the House as soon as such may be organised. The Deputy will have to appreciate that I have not yet received the report.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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Question 3: To ask the Minister for Communications; Energy and Natural Resources if he will consider the proposal (details supplied) which suggested that an offer of a half share of ownership be made to the Norwegian State in return for managing the natural resources in our territorial waters; and if he will make a statement on the matter. [22129/12]

Pat Rabbitte (Dublin South West, Labour)
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The proposal to which the Deputy refers was made in a print media article that began with a statement that Ireland was about to sign away almost all of our resources on terms by far the worst in the developed world. In reply I pointed out that both claims were factually wrong and demonstrated that the fiscal terms applying to profits from oil and gas production in Ireland were pitched at a level comparable with that in other similar European countries. In addition, I explained that under the 2011 Atlantic margin licensing round, applications were only received for approximately 6% of the area on offer. While the number of applications received was positive in comparison to the number received in previous licensing rounds, it still means that for the vast majority of Ireland's offshore, no exploration work is taking place. Having established that the reasoning giving rise to the proposal was flawed, it follows that the proposal was without basis.

The challenge for Ireland is not how to manage its natural resources but how to attract a sufficient level of exploration investment to establish our offshore oil and gas potential. Even with our current fiscal regime which is deliberately aimed at attracting new investment, exploration levels remain very modest.

If Ireland were to hand over a half share of its oil and gas resources to another country, apart from being an entirely daft proposal, it follows that the potential return that could be offered to incentivise oil companies to invest in exploration here would have to be reduced significantly. At current levels, the incentive has delivered modest results. If it were to be more than halved, that could end all exploration efforts in our offshore which would not be in our interests.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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While I would have liked to have tabled this question at the time the article in question was published, unfortunately, I did not have an opportunity to do so. However, the Minister's answer was interesting. I do not subscribe to the simple school of thought that there is a substantial amount of oil and gas in Irish waters from which we could make loads of money. The proposal which the Minister described as "daft" is an interesting one and should be explored. Given that the State receives only a minuscule amount of money from exploration companies which find oil and gas in Irish waters, it is difficult to ascertain what are the benefits of the current approach. Companies which find oil and gas in Irish waters are not required to land their finds in this country and may transport them elsewhere. In such circumstances, the benefits to Ireland are minimal. Would it not be worthwhile to discuss this issue with the Norwegian Government, given its extensive expertise and substantial investment in this area? Surely it would be worth a try.

Pat Rabbitte (Dublin South West, Labour)
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I presume the report to which Deputy Martin Ferris referred will result in the House discussing many of the issues Deputy Luke 'Ming' Flanagan raises. His question relates to the suggestion that "an offer of a half share of ownership be made to the Norwegian state in return for managing the natural resources in our territorial waters". If he looks at the Marine Institute map of Ireland, he will find that more of this country's territory lies offshore than onshore. I would not contemplate the notion of handing over half of our offshore natural resources to another country.

I am not sure what is the point of the proposal, given that our problem is one of finding oil rather than managing our resources. If we find oil, there is sufficient talent in the country to manage it. The problem, however, is that the strike rate since the 1970s has been very disappointing. We have had only three gas strikes, with one further strike in prospect, and no oil strikes. How Norway comes into the equation is beyond me. There are no similarities between Ireland and Norway in this regard, a view borne out by the submission the Norwegian ambassador made to the joint committee of which Deputy Ferris is a member. Norway has a strike rate of approximately one in four and a uniquely advantageous geology. Furthermore, the Norwegian Government refunds 78% of the cost of a dry well, so confident is it of strikes in its waters. This confidence is also reflected in the tax rate applied to oil and gas in Norway. If one drills dry wells, it does not matter whether the tax rate is 0%, 40% or 80% because it is still 0%, 40% or 80% of nothing. Our problem has been one of getting exploration activity offshore in the hope it will be possible to make a find. We do not need another country to do that for us.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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The Minister makes a relevant point when he notes that 80% or 40% of nothing is still nothing. However, one can apply the same logic to the idea of giving a 50% share of something to Norway because, as matters stand, it would amount to 50% of nothing. We could use the expertise developed in Norway and adopt the Norwegian approach to offshore exploration. While I accept that Norwegian waters have more oil than Irish waters and that it is, therefore, easier to make finds in Norway, on the basis that a high percentage of nothing is nothing, why not explore the proposal and ascertain its potential? Having done so, the Minister would then be entitled to describe it as daft.

Pat Rabbitte (Dublin South West, Labour)
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It is noteworthy that in the recent round of licensing which was, relatively speaking, more successful than previous rounds undertaken in the past decade, the Norwegian state oil company did not even submit a bid. It is not an issue of Norway having skills that are not otherwise applied here. The mistaken premise of the original article was that Norway and Ireland were comparable in terms of the potential for discovering hydrocarbons. The 13 companies to which we awarded licences a few months ago have the necessary skills. What we need is to get another 13 companies-----

Luke Flanagan (Roscommon-South Leitrim, Independent)
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Does the Minister disagree with the Frank Fahey analogy?

Pat Rabbitte (Dublin South West, Labour)
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If one is drilling two wells per annum, the prospect of making finds can be compared to finding a needle in a haystack. It is not a question of handing over to another country something that has, I hope, valuable potential for the State but of trying to strike the right balance to persuade exploration companies to come here. We do not have the investment required to establish a State oil company which would engage in exploration and drilling.