Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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3. To ask the Minister for Communications, Energy and Natural Resources if he has any knowledge of actual production of oil from the Connemara field; and if he will make a statement on the matter. [51906/13]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Time and again the Minister has told the House that the justification for a low tax regime on oil and for licensing arrangements whereby ownership of our gas and oil reserves has effectively been handed over to oil companies is that we only have potential reserves, not actual reserves. If that is the case, could he explain how this jar of light crude oil, just a small sample taken from a tanker-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We do not display items in the Chamber.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I will put it down. An oil tanker was filled-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Could we have the reply, please? The Deputy's time has concluded.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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-----in 1997. A week's pumping filled a tanker. Where did it go, who took it and did we get any money for it? This is real oil, not potential oil.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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The Deputy's 30 seconds are well up. In case the Minister of State is not aware, as this is his first Question Time since the change-----

Fergus O'Dowd (Louth, Fine Gael)
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It is.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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-----it is now open to a Deputy by right to use up to 30 seconds, if he or she wishes, to explain the question.

Pat Rabbitte (Dublin South West, Labour)
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We are getting more democratic every day.

Fergus O'Dowd (Louth, Fine Gael)
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I am delighted that Deputy Boyd Barrett has raised this issue. I will happily confirm to him that the Connemara field was subjected to an extended well production test by Statoil between July and September 1997. The test involved regular stopping and restarting of the flow from the well, which was named block 26/28-A1Z, to test flow rates and reservoir pressure levels. Stable flow rates were never achieved throughout the test. The decline in reservoir pressure observed from only a limited volume of production, coupled with the slow build-up in reservoir pressure following the production period, confirmed that the well was incapable of sustaining commercial production rates.

Oil recovered from the test was transferred directly to the tanker Berge Hugin instead of being flared off. The cumulative volume of oil recovered during the entire 69-day test was 16,500 barrels. The well was not commercially sustainable. Since exploration began in the Irish offshore in the 1960s, there have been a number of non-commercial discoveries, including the Connemara field. There have been no commercial discoveries so far.

In 1997, as part of the full field development of the Connemara field, Statoil drilled two appraisal wells. Neither was found to be commercially viable. On the basis of the results of the appraisal programme, the wells were plugged and abandoned and Statoil decided not to proceed. It relinquished the acreage to the State in October 1999.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The story shifts as we investigate further. I will quote something that the Minister, Deputy Rabbitte, told me a while ago. He stated: "Since the early 1970s, we have had four gas finds and no oil finds."

Fergus O'Dowd (Louth, Fine Gael)
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Commercial finds.

Pat Rabbitte (Dublin South West, Labour)
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Yes.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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He did not say "no commercial oil finds". He said "no oil finds". Now it is "commercial". However, we have discovered that a tanker of oil was pumped out of the Connemara field. Although it was plugged, one of Statoil's then directors, Mr. Stein Bredal, has since stated publicly that doing so was a mistake, as technology has caught up to the point at which the pressure problem can be addressed. I presume this is the reason other oil companies still have an interest in the area. They know there is not potential oil down there, but real oil. They are waiting for an opportune moment to extract it, just as property developers sat on land banks for ages-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I thank the Deputy. I will allow him to contribute again.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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-----until they could get maximum profits.

Fergus O'Dowd (Louth, Fine Gael)
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It is exceptionally obvious that if the company had found commercial oil it would have developed it. That it handed the licence back to the State meant it did not believe there was potential at the time, notwithstanding the fact that some oil was found.

We are trying to get more companies to go into such fields along our coast. We announced recently that we would open the Atlantic margin for a new run next year. We want more companies to get involved. This and next year we will have spent €20 million on studying the geological and seismic conditions. This will make it easier to identify sites that may have the potential to be exploited, given the changes in technology. No one is sitting on the oil because no one has it. That company handed back its licence.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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One of Statoil's former directors has since said that handing the licence back was a mistake, as modern technology allows-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I am sorry, but this is Question Time. We ask questions.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I am asking a question. The former director has acknowledged that it was a mistake and that the field could be commercially viable. Can there be a justification any longer for the ridiculously and pathetically low tax rate, the lack of royalties and the effective handover of ownership, through our licensing system, to private oil companies of a reserve of oil that will almost certainly be commercially extractable and profitable in the very near future, if not this minute? We know the oil is down there. It is only a matter of time before it is extracted.

Under the current regime we will get nothing from it. We will probably get as much as in a little container of oil.

Fergus O'Dowd (Louth, Fine Gael)
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Earlier this year, I examined drilling activities by Exxon-Mobil 165 kilometres off the west coast. The company spent $150 million on that drilling operation but found no active hydrocarbons. In other words, no commercial hydrocarbons were present there. Therefore, it is not a matter of giving it away, it is a question of companies taking a punt on where they think is the best place to go. My Northern Ireland counterpart and myself have agreed to examine new terms for the future. I have taken on board the issue of taxation on oil revenues which was raised in the report of the Oireachtas Committee on the Environment, Culture and the Gaeltacht.

That matter is out for tender at the moment and we will make a decision on it early next year. The key point is, however, that there have been no commercial oil finds to date. We are encouraging private companies to come in and exploit. We are looking at current and future terms, but not retrospectively. One of the Oireachtas committee's recommendations was that if changes are to be made, they would not be retrospective. We are competing in a difficult field with Norway and other countries. If a company has $150 million to spend and goes for a strike in Norway or Britain, it has a far higher chance of succeeding than off Ireland. We are re-examining the terms but there are no hidden reservoirs that somebody has their hands on and will press a button to activate sometime in the future. Companies want to come here to spend money and exploit that resource. We are happy with that and are encouraging them in. This year, there are more companies interested than ever before.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I am sorry but there is a time limit.

Fergus O'Dowd (Louth, Fine Gael)
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In 2011, 13 licensing options were given. Some 12 of those are converting into frontier exploration licences, which is positive and constructive. We welcome the companies' commitments.