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Dáil Committe Debate of 22nd Nov 2011 - Irish Offshore Operators Association submission


Chairman: I welcome representatives from the Irish Offshore Operators Association and the SIPTU members and members of the general public in the Gallery.

I apologise for the delay. There was a vote in the Seanad, which held us up for 15 minutes, because under the rules of procedure we must have a quorum to commence. We are required to have a member from the Seanad or Dáil as well as meeting other rules before we have a quorum. We then dealt with the private business as quickly as we could.

I welcome Mr. Fergus Cahill, chairman of the Irish Offshore Operators Association, Mr. John Conroy, regulatory affairs planning manager of Shell and E&P Ireland Limited, Mr. Mike Murray, head of development projects, PSE Kinsale Energy Limited, and Mr. John O’Sullivan, technical director of Providence Resources plc. We would like to hear the views of the group on the development of an offshore industry and its potential.

Before proceeding, witnesses are protected by absolute privilege in respect of the evidence they give this committee. If you are directed by the committee to cease giving evidence in relation to a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise or make charges against any person(s) or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

Before I call on Mr. Cahill to make his opening statement, I request that all mobile phones be switched off as phones on silent mode cause interference with the broadcasting communications unit and worthy contributions will be lost if there is interference from mobile phones.

Mr. Fergus Cahill:  At the outset may we thank the chairman and members for the invitation to appear before the joint committee? On 27 September 2011, officials from the Department of Communications, Energy and Natural Resources appeared before the committee and presented a comprehensive picture of the science and technology underpinning oil and gas exploration. During these proceedings, the members of the committee expressed the opinion that we should develop an indigenous offshore industry. At the outset let me say that the Irish Offshore Operators Association, IOOA, shares this view and rather than go over that ground covered by the departmental officials, we propose to examine the reasons that we do not have such an industry at this time; to review the benefits that can accrue from such industry and which have already accrued; and to suggest measures which would assist in this.

The Government is frequently urged to introduce a Norwegian-style licensing regime. We should remember we had such a regime, from 1975 until 1987. During that time, there was not a single commercial discovery. So, the Government of the day did what Governments do when they wish to stimulate a failing regime, it reduced tax, initially by abolishing royalties, as had already been done all over north-west Europe, and later by reducing the tax rate to 25%. In spite of these measures, interest continued to decline. During the period 1994 to 2009, 40 frontier exploration licences were issued and of these, 23 have been surrendered to the Government. In 1985 our association, IOOA had 17 members. Of that 17, only four remain. Since 2008, with the introduction of the Indecon terms, only four exploration wells have been drilled and all of them were dry.

The reasons for this decline may be summarised as follows. The first is the lack of drilling success. There has been one successful commercial discovery in 35 years of explorations. In terms of drilling success, Ireland lags far behind the North Sea, and is seen as a poor bet when it comes to exploration investment. The offshore environment, especially in the Atlantic, is extremely challenging, and operating costs are high. For instance, just to drill a well off the west coast, it will cost €6 million to relocate the rig from the North Sea to the west coast, before a metre of well is drilled. A single deep-water well off the west coast can now cost around €70 million. Ireland is perceived as an unrewarding and difficult place in which to do business. We recently heard the CEO of an Irish exploration company, which is successful in Algeria, Italy and more recently in Kurdistan state that his board would not countenance involvement in Ireland, because it was “too risky”. The extreme difficulties and delays in bringing a discovery into production are well appreciated internationally.

The policy background to offshore exploration is the White Paper on Energy Policy, 2007 to 2020 which states the primary strategic goal of Government is “creating a stable and attractive environment for hydrocarbon exploration and production”. In that year the International Energy Agency, IEA, reviewed Irish energy policy, and recommended that:- “great care should be taken not to increase the risk for developers by tightening the rules”. In that year, the Government also received the Indecon report. Let me digress to say the Indecon report models 15 development scenarios in 15 comparable licensing regimes. I should emphasise that the only way to achieve an accurate comparison of licensing regimes is to model fields, taking all the factors into consideration. Headline comparisons of tax rates mean very little. Indecon recommended - and its full recommendations are in the paper, which has been circulated - that there should be no change to the fiscal terms for the less profitable fields; there should be a resource rent tax of between 5% and 10% for the more profitable ones and in the future, if significant commercial discoveries were made, then additional increases could be applied to new licences. In the event the Government went further than Indecon’s recommendations and increased the maximum tax level to 40% which was contrary to the advice of the IEA. It is in that context and the failure of previous policies to develop an industry that we reviewed the results of the recent Atlantic margin licensing round.

The Minister announced that he had offered licences to 13 applications and at the outset we acknowledged that this was a significant improvement on previous rounds and it is understandable why it might be presented as a success. In 2009, there were only two applicants, both for the same acreage, which resulted in the award of one licence. However, when one examine it a little more closely, the areas for which the new licences were sought amounted to just 6% of the area on offer. That is not 6% of the total Irish offshore but 6% of the area on offer. None of these licences is an exploration licence proper, rather licensing options, which do not carry major work programmes and may or may not be converted into exploration licences after two years. The Financial Times summarised the position rather well, it stated “in a blow to the Irish Government’s drive to increase offshore exploration, none of the world’s oil majors applied”. In other words, no major companies applied at all for the new round. Let us put that into perspective. A recent UK round, the 26th round in 2010, attracted 350 applications and 144 licences were awarded. Appendix 2 lists the companies awarded licences and that puts the points vividly into perspective. This is not an isolated instance. In 2005, the UK offered 152 licences. Members can read the numbers on page 5 of the submission. We must realise that Ireland is not regarded by the oil and gas industry as a fat goose waiting to be plucked. As far as the international oil and gas industry is concerned, Ireland continues to have serious reputational problems and it is important that we recognise this.

This perception is fuelled by the uncritical acceptance of urban myths. The first is that oil companies are sitting on huge areas offshore where they know there are vast resources and they are waiting for the optimum time to develop them. It is a fact that 3% of the total area off Ireland’s coast is under licence. If all the recent offers are accepted - it is by no means certain that they will be - this figure will increase to 5%. The terms of licences are specifically designed, as departmental officials have explained to the committee, to prevent people holding on to acreage.

The second urban myth is a dodgy deal was done with the industry to remove royalties and reduce taxes. The UK removed royalties on new production in 1982, Norway followed suit in 1985 and Ireland did so in 1987. For practical purposes, royalties have disappeared in north west Europe for the good reason that they are disproportionately penal on high risk, low return projects. The adjustments to the fiscal regime during the 1980s were a measured and rational response to the utter failure of previous licensing terms.

The third urban myth relates to the question of why we cannot be like Norway, which takes a 78% share in projects. If one drills a well in Norway and it is dry, one gets back 78% of one’s investment. Furthermore, one’s chances of finding something and achieving commercial success are approximately 1 in 5 as opposed to 1 in 40 in Ireland. Either way, it is much more attractive to work offshore in Norway. The only valid comparison, as the Minister has recognised, is with France, Spain and Portugal, which have broadly similar regimes and poor success rates. There is an erroneous domestic belief that vast offshore riches are waiting to be tapped and, on the other hand, there is the industry’s perception that Ireland is a cold church for offshore exploration.

Despite this, the offshore industry has brought significant benefits to Ireland, at both national and local levels. I will not go into these in detail as they are outlined in the submission. The Kinsale Head field, 33 years into its life and in decline, maintains 100 jobs directly with a spend in the local economy of approximately €30 million per year. The Corrib project, at the peak of its construction, employed 1,400 people and, more important, it will provide 130 well paid and secure jobs for the long term. These jobs cannot be helicoptered out of the country at a month’s notice, as we recently witnessed in Waterford.

Another benefit is the extension of the national gas grid to the north west, which would have been uneconomic without the support of Corrib gas. A recent report by the Western Development Commission said that another extension of the grid, which is the responsibility of Bord Gais, would save an additional €20.6 million in local towns.

Involvement with the offshore industry often materially assists the long-term development of a local contractor. Appendix 3 describes just two such companies. Project Management Limited got a contract from Marathon in 1976 for offshore work. It built on that and it now employs 1,600 people worldwide and carries out projects in 30 countries. Roadbridge, a local construction company, worked on the Corrib project and the north west gas pipeline and it is emphatic that this opened the door for it to secure contracts in Scotland and Australia. Even the current low level of exploration brings benefits. In the port of Killybegs, 23,000 additional man hours were worked servicing the Corrib operation. The port has been devastated by the failure of the fishing industry.

With regard to taxation, a recent study by the Department shows that a so-called “giant” oil field offshore Ireland would over its lifetime pay €16 billion in tax. Even small fields would pay a proportionate amount. The only downside has been for the industry. Since 1969, the industry has spent €3 billion in today’s money. The vast majority of companies that have drilled offshore in Ireland have lost huge sums and at least one went bankrupt.

The first thing that has to be done is to put in place a regulatory and administrative regime that facilitates a predictable field development process. It is crucial if a company spends €300 million or €400 million getting an offshore oil or gas field to the stage that it can be developed, that it has an assurance that the development process will work. We have asked the Minister to set up a group to study this, to see why the current system is not working and to recommend measures to improve the situation.

Second, promotion needs to be intensified. There is a feeling that there is a queue of people on Adelaide Road waiting to knock on the Minister’s door to take out licences. Nothing could be further from the truth. There is a queue in Norway. The New Zealand Government has spent a great deal of money acquiring seismic data, which it gives free of charge to potential licence applicants. That is the competitive environment we are in and the Department should be resourced properly to do the promotion properly internationally and to separate the regulatory from the promotional function

Third, we should assure potential applicants for licences that their presence and investments in offshore Ireland will be welcome. We require no financial support or State aid, and once established, the jobs and the tax revenues remain in the State for the long term. We suggest that proactive steps be taken by public representatives and relevant Departments and State agencies to increase understanding of the industry and to assure potential applicants for licences that their presence and their investments are welcome. In particular, applicants for licences need to be assured of the long-term stability of the licensing regime.

At the outset, we indicated our agreement with the committee regarding the development of an indigenous oil and gas industry. This can not be achieved while exploration remains low level and spasmodic. It can only happen when there is a substantially higher level of offshore activity leading to commercial discoveries and development projects. Our association would be grateful for the assistance of the committee in reaching this objective. We would like to thank the committee for the opportunity to explain our point of view and we invite the committee to endorse the policy of both the previous and the current Administrations, as set out in the White Paper, to create a stable and attractive environment for hydrocarbon exploration and production. We also invite the committee to express its support for our industry, which takes such immense risks and which offers serious long-term benefits to Ireland.

Chairman: I propose to take questions and comments from four or five members at a time before seeking a response.

Deputy Éamon Ó Cuív: I welcome Mr. Cahill and I thank him for his submission. There are two reasons we are examining this issue. The most fundamental one is to maximise the take from hydrocarbons, a State resource, under land or under the sea on behalf of the people. The second is to obtain public buy-in in respect of current or future Government policy. We must consider all the issues and ensure that the maximum possible return will be obtained for the people from the resources to which I refer. Mr. Cahill asked for support for the industry. What we want is support for a policy that will maximise the take for the Irish people. The industry will also get its share but we must realise results for the ordinary citizens of this country.

We previously had a long meeting with representatives from the Department. At the end of that meeting there were a number of unanswered questions, including one which Mr. Cahill raised earlier. He stated that only 3% of the Irish offshore area is under licence at present. I accept that this is probably true. However, the representatives from the Department indicated that there are certain offshore areas which are much more likely than others to have exploration potential. What we are doing here is similar to considering the position of a farm which is 90% bog and 10% good grassland and on which the owner wants to grow grass. It could be stated that, regardless of the bogland, the farmer has 90% of the usable land in his ownership. What percentage of the basins where hydrocarbons are likely to be found are currently under licence? If a field similar in size to the Ekofisk field located off the coast of Norway were found off the Irish coast in one of the areas in respect of which exploration licences have been issued, pursuing further finds would become similar to shooting fish in a barrel. In such a scenario, what percentage of the areas where it is likely that finds would be made are under licence? I understand that the Ekofisk field off Norway was almost missed and that it was only discovered because the Government of that country insisted that the exploration company drill down to the greatest depth. Not only was oil discovered in that instance, the remainder of the field was also located.

I accept that I may not be explaining what I mean in very clear terms. There are certain offshore areas where there is a high potential that hydrocarbons will be found. The potential for making finds in other areas is much lower. What percentage of the high-potential areas are licensed at present? If we were to discover a field which was the equivalent of the Ekofisk field off Norway, what percentage of the areas where it would be likely that finds could be made would already be licensed? This is one of the major questions which people ask.

I have no difficulty with the idea of a loss leader. After all, one attracts people into one’s supermarket by offering them a bargain. However, one does not sell the remainder of one’s products at bargain prices. If, therefore, we want someone to locate a field from which hydrocarbons can be produced and if we are only issuing a small number of licences, I have no difficulty with offering relatively attractive terms. As Mr. Cahill stated, the figures speak for themselves. There are those who state that there are endless amounts of hydrocarbons waiting to be discovered off our shores. If that is the case, why is more drilling not taking place? I am concerned about a scenario where there might be a successful find and where we might have virtually given away the rights to it. We must, therefore, be careful to strike a balance. Perhaps Mr. Cahill might clarify the position in this regard.

There are 14 fields under active appraisal at present. The discovery dates relating to some of these fields are 1974, 1978, 1979, 1981,1985, 1989, 1996, 2009, etc. Most of the fields to which I refer are under assessment but the Corrib field is obviously under development. How long will the Department allow an exploration company to keep a field under assessment? Can a company merely sit on a field and wait until the price of oil increases? We are continually informed that time limits apply. However, such limits do not appear to apply in respect of the 14 fields to which I refer. A number of those fields were discovered many years ago. For how long can a field be held under assessment and how long does an exploration company have until it must decide to bring oil or gas ashore? The case has been made that there could be massive amounts of oil off our coast and that the oil companies are merely waiting until the price rises before they bring it ashore and make a greater killing.

The Department is continually informing us that we know everything the exploration companies know. How do we know that this is actually the case? If one carried out a vox pop on O’Connell Street, I am sure one would discover that not too many people believe we know everything the oil companies know. I would love to discover whether we know everything they know. If we do know everything, then why is there always resistance to putting those who represent the interests of the people of Ireland onto oil rigs located off our coast? A great deal of this matter comes down to confidence. It is important that we should build up such confidence.

I am of the view that good progress has been made in respect of the regulatory position. When Enterprise Oil began its operations in the Corrib field, the development system that was then in place was less than optimum in nature. As a result of what happened in respect of the Corrib, there has been a major benefit for everyone. I refer to the fact that a system which is better than that which obtained when operations at the field commenced is now in place. Will Mr. Cahill indicate whether the regulatory system to which he refers would also relate to the actual recovery of the oil?

If the exploration companies find oil or gas, what is to stop them loading it on tankers and taking it elsewhere rather than bringing it ashore here? If they did this, they would obtain market price for the product and all the State would get would be the related tax take. In such circumstances, no jobs would be created here.

Deputy Martin Ferris: I thank Mr. Cahill for his presentation. The vast majority of companies which invested in exploration off the coast of Ireland have lost huge sums of money and at least one went bankrupt. I am puzzled, therefore, by the increased interest in exploration. Our guests represent a number of companies which have benefited from the exploration work carried out off the coast of Ireland.

Would it be possible to make available to the committee the private study carried out by Wood MacKenzie Research and Consulting in 2003 on behalf of Shell? I understand this study predicted a tax return of just €340 million in respect of the Corrib project. If that is the case, what are the potential overall benefits which might emanate from that project?

I cannot understand the portrayal of what the association calls the “downside” and also that there was very little take-up between 1995 and 1997 because of the tax regime in this country. The tax was reduced and still there was no take-up, yet the tax has now increased and there is a take-up. I do not understand what the association is trying to tell us. The former Minister, Mr. Eamon Ryan, to his credit, increased the tax take to the Exchequer, and there has been an increase.

I am aware that Providence Resources has a number of licences to drill next year. Mr. Cahill made many references to the fact that this would be hugely beneficial due to all the jobs that will be created and so forth. When one looks at it, a person who wants to work on an oil-rig must leave Ireland in the hope of getting on a rig and come in on that rig. There are Irish workers currently residing in the State who have worked offshore for many years and they cannot get a job on an oil-rig. Even if there were benefits in the workplace for Irish roughnecks, roustabouts, electricians, crane operators or whoever, they cannot get such work unless they come into Irish waters on a rig that could come from anywhere in the world. I would argue that the reason for that is to prevent the unionisation of workers on the rig.

I was a rig worker and I was in the union at the time. In my village of Fenit and the surrounding areas, there were over 100 employed. Part of the association’s report made mention of SEDCO 711. I worked on SEDCO 707 and SEDCO 708 where conditions were good because they were unionised.

Also, at that time there was a strike in the Porcupine Basin which was capped and left there. We do not know what was there. In a previous meeting here, there was reference to the geologist’s report. Has the Department access to all of the geologist reports that have been done on oil-rigs to date? There is no point in telling me that the company will provide the Department with the information. Is there somebody from the Department on board the oil-rigs who has access to those reports because I do not trust the oil companies?

I will not sit here and be a hypocrite. I do not trust the operators. From the evidence that I have seen, both nationally and internationally, I do not think anybody could trust them. What we need is transparency and honesty. What we need are benefits to the Irish people and for the Exchequer from the exploration of Irish resources.

I cannot accept how Mr. Cahill went through a synopsis of the association’s report. I was trying to read through it and keep up, and he was jumping from A to B to C. Taking his report on board, it is mind-boggling why the operators are even interested in drilling.

Mr. Fergus Cahill:  I am sorry?

Deputy Martin Ferris: It is mind-boggling that the operators are still interested in drilling because the report is so negative.

Getting back to the benefits, there are no benefits to the Exchequer as of yet. The operators can write off for up to 25 years of all of their exploration work. The operators determine what is the cost of their exploration work. The Department has no input into costs. The operators determine what the costs are and they can write them off.

Can Mr. Cahill answer one question? The committee was told here by the Minister that the Department can look retrospectively at a find. If one of these operators enters into a licensed contract to drill a well and the top return to the Exchequer is at 40%, can the Department, if there is a substantial strike, bring about a situation where it can force the company to pay more than 40% or whatever percentage was agreed initially? I would like to know the legal position on that. If, for instance, an operator has a viable commercial strike in the Irish Sea, there is nothing compelling the operator to bring that oil ashore in Ireland. The oil can go directly out of Ireland without any benefit whatsoever to the Irish people, either in the workforce or in returns to the communities closest to where it has been found. For example, is the oil from the Dalkey project being shipped directly from a rig to the refinery in Milford Haven? Providence Resources might be able to answer that.

It was stated that out of 142 exploration holes, there have been only four wells in production. What does “under assessment” mean where wells for oil or gas have been dug and are currently under assessment? There must be some find if it is under assessment. The operator would not assess something where there is nothing other than water in it. From the information in the possession of the operators, what is the potential for those wells under assessment to become viable production enterprises?

Part of the association’s recommendation is to put in place a regulatory administrative regime which facilitates a predictable field development process. Would Mr. Cahill elaborate and enlighten us in that regard? I will leave it at that for the moment.

Deputy Thomas Pringle: I have four quick questions. In his presentation, Mr. Cahill mentioned various figures, between 130 and 160, for the number of wells drilled since the 1970s at a cost of approximately €3 billion. By my estimates, that works out at approximately €20 million per well, yet Mr. Cahill quoted a figure of €70 million for a well in his presentation and a couple of weeks ago the Department spoke of €130 million per well. I would ask for some clarity on those figures and on the actual cost of drilling an exploration well.

Mr. Cahill also made reference in his presentation to the tax regime in France, Portugal and Spain. This also arose in the Department’s presentation to the committee a couple of weeks ago. In 2007, the House of Commons Scottish Affairs Committee examined taxation regimes in 85 countries, and France, Spain and Portugal do not figure anywhere in that report. I wonder about that and why those countries are so popular now.

Mr. Cahill stated in his presentation that Ireland continues to have serious reputational problems. Perhaps he could outline the impact of the disastrous development of the onshore refinery in Mayo and the perception of the way the community has been treated there in the initial stages with the jailing of the Rossport Five. He might also outline what that has done to damage Ireland’s reputation international and comment on the way that has been developed and handled, both by the company and by the State. That has probably had a greater impact in undermining our international reputation than the difficulties of exploration offshore. What would be the impact if the Government decided to introduce production-sharing agreements for future licensing?

Mr. Fergus Cahill:  The first question asked by Deputy Ó Cuív - forgive me if I have missed some - was about the area under licence. Some 3% of the total area is under licence. Mr. O’Sullivan is probably better placed than I am to comment on that.

Mr. John O’Sullivan:  That was the million-dollar question - where are the sweet spots? As an explorationist, I would love to know where they are. I think I know where they are for Providence Resources; Shell might think it knows where they are for Shell. The industry, collectively, has spent €3 billion over the last 40 years chasing what it thought were the sweet spots, so the question is in a sense unanswerable until somebody actually makes a discovery and demonstrates - primarily in oil rather than gas - a major find, most likely off the west coast. One can only find the sweet spot by drilling wells. A classic example of this was when a lot of wells were drilled in the Celtic Sea in the 1970s. People thought the sweet spot was there, but they have since moved to the west coast. They were in Porcupine Bank, based out of Fenit, the Slyne Trough and the Rockall Trough. Each generation, as exploration proceeds, moves into new areas.

From a technical perspective, it is difficult. If I knew the answer I probably would not be sitting here - I would be sitting on a beach somewhere. I would have answered the million-dollar question - we would either know where the hydrocarbon reservoir was or we would know where it was not. That is what exploration is about. One must drill the wells to find the sweet spots. Therefore, the question is relatively unanswerable. Each company has licensed areas where it believes there is potential; wells have been drilled in the past, and most of them have failed. Ireland has a pretty dismal exploration record, as Mr. Cahill pointed out in the presentation, yet we continue to endeavour. It is a high-risk, high-reward industry. Most exploration will not work, but everybody believes he or she knows where the next sweet spot is. I think I know from the Providence perspective, and so on.

Mr. John Conroy:  Deputy Ó Cuív referred to percentages. We said that in spite of what we read about the giving away of acreage offshore, something like 6% of the area on offer was applied for, and the figure of 3% applies to the entire Irish offshore area. The Deputy asked which of these areas were good and which were bad, making an analogy of a poor farm of which part is bogland and part is grass. I will try to answer that, but one would have to take a map and work out the total area and the percentage involved, and then identify areas that did not have particularly good prospects. One would have to do an exercise. I suppose the Department would be in a position to do that.

Much is said about the Rockall Basin and I have heard a lot about it over time. It is a huge basin which extends into the UK sector. It is a significant area of sedimentary basin and would have been deemed as prospective for oil and gas. One could take that area as an example. Two licences were awarded for this area in the recent round. The vast majority of that basin, which is prospective on a map, is still available for anybody to make an application to the Department or for the Department itself to do something. It is possible to come up with a number but the fact remains that there are large tracts of what are seen as prospective areas which are unlicensed. They are there and the State fully owns them.

Mr. Fergus Cahill:  Deputy Ó Cuív inquired how long it is possible to sit on a discovery. The answer is only as long as the Department allows one to do so. Mr. O’Sullivan might take us through the history of the Dunquin project to show how that actually works.

Mr. John O’Sullivan:  The appraisal, and the length of time it takes, were mentioned. I will start with Spanish Point and then go on to Dunquin; these are two projects that are in the public eye. The Spanish Point field was first discovered in 1981. It is down as a 1981 discovery by Amerada Hess and Phillips Petroleum, now ConocoPhillips. They made the discovery, assessed it and decided it was not commercially viable for development due to oil prices, infrastructure, technology and location. They relinquished the field in the mid-1980s, giving it fully back to the State and saying that if the State wanted to set up a national company and develop it, it could do so.

The field was put out for bidding under a licensing round and in 1995 it was licensed to a group operated by Statoil and Chevron. They worked on it for four years and then relinquished it in 1999. This is one of the famous capped wells - a resource that is sitting there.

The licence was again put out for bidding in 2004, so it was held by the State post-discovery for 20-odd years. Nobody bid for it, although it was a public bid and all the major oil companies were offered the information. In the third phase of that licensing round, Providence bid; nobody bid against us and we obtained the licence. We subsequently secured a farm-in agreement from a UK private company which provided $12 million for 3D-seismic studies and subsequently made well commitments. We have taken an existing discovered resource, which was handed back to the State on two occasions, and we have Irish staff, based in Dublin, working on the data, which is publicly released, to craft an investable proposition which, if successful, will accrue to the State.

The second example I will give is Dunquin, which is in the south Porcupine Basin in deep water and is currently operated by Exxon Mobil. It was originally licensed in 1999 by the Department. A public bidding process was carried out and there was one application for the block, which was from Total, a French multinational oil company whose predecessor company was Elf. It picked up the acreage 100% and worked on it for four years but could not create an investable proposition for drilling. It could not secure third-party farminees etc., and it handed it back in 2003. In 2004 the licence became available for bidding and Providence bid in that licensing round. All the other oil companies were offered access to the acreage, including Exxon Mobil, which did not bid in the licensing round. There were no other bidders.

As Mr. Cahill said, Ireland is not a good street address for exploration. The statistics really hurt us and Corrib does not help either. We picked up Dunquin. Again, Irish employees based in Dublin created an investable proposition which we packaged and farmed out to Exxon Mobil. The myths about that deal stupefy us in the office. Some people say that Tony O’Reilly’s Providence Resources received $100 million from Exxon Mobil as part of the deal but that is completely untrue. We have a carried interest if a well is drilled - and a well is planned for drilling. We had to work through a process. We acquired seismic data on behalf of Exxon Mobil, operating to its standards, which was good for our staff, who are Irish-trained employees here in Dublin. Eni and Repsol have joined the group, and we plan to drill the well within 24 months.

Areas of potential become resources only when one drills them, and to drill them one needs to attract investment. What we do at Providence is to use our shareholders’ funds to invest in these projects - we have no State aid - or bring in third parties to invest alongside us. It is a high-risk game but we have been successful in securing a number of farminees to work alongside us.

There has been much commentary about capped wells or discovered resources that are sitting offshore. However, when they were discovered they were deemed uncommercial. We are currently operating a rig offshore at the Barryroe well in the Celtic Sea and it is costing us $500,000 per day. The rig is appraising a discovery made in the 1970s by Esso Exploration and Marathon Oil. They drilled five wells in a structure. They spent several hundred million dollars in today’s money but they could not make a commercial proposition of it and handed the acreage back to the Irish authorities. Several hundred million dollars were invested by these multinational oil companies which flowed oil to surface, demonstrated it and then gave all the data to the Irish authorities. They walked away and put it to the Irish State that if it wished to develop the site 100%, it could have it. Several myths exist in terms of shady deals and payments between multinationals and small companies and capped resources. We examine some of these blocks that are available for licensing but which no one has bid for. Otherwise, Providence, a relatively small company with limited means, would not have been able to out-bid some of the larger players to take the acreage. We find it astounding to see some of the commentary and the reports in some of the media. It would be great if someone paid us $100 million but it does not happen.

Mr. Fergus Cahill:  Deputy Éamon Ó Cuív also inquired about Irish employees on rigs. It is necessary to clarify that oil companies do not operate drilling rigs. They are operated by contractors such as Transocean or Sedco.

Deputy Éamon Ó Cuív: I wish to clarify the point. I asked about the Government. Deputy Ferris spoke about workers.

Mr. Fergus Cahill:  I beg Deputy Ó Cuív’s pardon.

Deputy Éamon Ó Cuív: We left that job to him. I asked about the Government having someone on the rig to look after the people’s interests.

Mr. John O’Sullivan:  We are drilling at the moment and we have a live feed of data from the rig. The petroleum affairs division of the Department has access to the data stream and it receives all the data we receive. I have already outlined instances of discoveries made at Spanish Point and Barryroe that were handed back to the State by companies. If we really believe some conspiracy theory is under way in the oil industry, why would Esso and Marathon Oil hand a discovered resource such as Barryroe back to the Government? Why would Amerada Hess and Phillips and subsequently Statoil and Chevron hand back the Spanish Point discovery to the State? I put the question and leave it out because it does not make any sense. If there is secret information why would companies undertake wholesale relinquishment of acreage whereby it is simply returned to the State? As Mr. Cahill pointed out, blocks have been worked and significant investments made in shooting seismic and drilling wells. There is no evidence of the claims on examination. Acreage is simply surrendered.

Mr. John Conroy:  The Government does not have people on rigs currently. This may be a resource issue. Typically, it would be onerous in terms of manpower for the Government. The question of data and information was raised. In fact this area is a good deal more regulated than one might think at a first look. All data acquired during a drilling campaign is initially agreed with the Department. Often the Department insists that we acquire additional data which we might believe is not of commercial value. We agree a programme up-front. We do not get approval to mobilise a rig and drill a well until the Department has signed off fully on all the data acquired. Sometimes, Department officials asks us to acquire data that it sees as valuable for the promotion of the area subsequently if a company decided to relinquish the acreage. As Mr O’Sullivan said, they get the data in real time and I gather the Department officials confirmed this during their last visit here. They receive the data in real time just as we do. They must interpret the data and they have their own geologists and technical personnel to do it, but they get all the data. When a company relinquishes a licence it is obliged to give all data, including most of the reports generated to the Department, which has work programmes involving requests for the reports. It is a regulated, structured process. I know those involved get all the data but I am unsure how one could demonstrate this physically to a person looking in from the outside.

Deputy Martin Ferris: I wish to ask a question on that point. Does the Department have geologists and technical people on board the rigs in conjunction with the company technical people?

Mr. John Conroy:  Typically, they do not have resources on the rig.

Deputy Martin Ferris: Therefore, they are dependent on the company supplying them with the data.

Mr. John Conroy:  They get all of the data.

Deputy Martin Ferris: They are depending on that.

Mr. John Conroy:  Yes, and they get it as well.

Chairman: I wish to intervene. At the submission in September, Mr. Murphy - I may be wrong about the surname - the geologist with the Department outlined the way it works.

Deputy Martin Ferris:   I would like to check the record but previously we were told here that the Department had technical people and geologists on board. Now we are being told this is not the case.

Chairman: To the best of my memory, Mr. Murphy outlined the position along the lines of what has been said here today. He stated that the Department had real time feed in to the data. I am paraphrasing his words but he said that if there is anything out there they will know about it. These were the words he used. This is to refresh people’s minds. Anyway, I call Mr. Murray.

Mr. Mike Murray:  I will offer a different perspective. Our company has been involved in production for many years and I assure the Deputy that the Department keeps a close eye on what we do. Those involved in the Department get data on the exploration side every day, as Mr. Conroy has said. They get production figures from every well, every day. I assure the committee that on many occasions the Department has had cause to check what we are doing. They send people out to see what we are doing and to verify that the numbers are correct. They get the data. It is up to them to examine it and interpret it as they see fit but there can be no doubt that they get the data and they have the right to come onto the facilities and they have done so on many occasions with our company.

Mr. John O’Sullivan:  If one makes a discovery or finds oil shows, one needs permission from the Department to carry out subsequent activities. If one has not given the Department the data and one is hiding something, how could one get past it with a subsequent work programme? We must give the Department sight of everything. These are the rules and this is what companies do. Subsequently, the Department gets to access the data and then we make an application to the Department to carry out other activities, such as well testing, and for the Department to formulate its approval for well testing it must have all the data in good time. If a conspiracy were in place and a company was giving the Department false data and then it came with a well test plan and other data, it would become apparent that there was concealment. Meanwhile the company would be sitting on a rig costing $500,000 per day waiting for a decision. Plenty of urban myths and rumours circulate about what goes on but the data is the data. We are all disappointed that Ireland offshore has disappointed in terms of prospectivity. We all hoped for a future. People on the street probably think many big discoveries have been made out there and the oil companies are hiding them but, unfortunately, this is not the case.

Chairman: Three more speakers are offering. Another presentation is scheduled and I have no wish to rush this dialogue but-----

Deputy Thomas Pringle: Four more are offering.

Chairman: Four more are offering. Although there are unanswered questions do committee members mind if I get to the remainder of the contributors? SIPTU is waiting patiently to make its presentation. Deputy Pringle, were any of your questions unanswered at this stage?

Deputy Thomas Pringle: Four questions.

Chairman:   Will the delegation go through these, please?

Mr. Fergus Cahill:  On the question as to why the cost of an offshore well is €70 million and why it only generates €3 billion, the answer is the cost depends on where it is, how deep the water is, the environmental conditions and how deep one is drilling. There is a wide variety of variables. A lot of wells that were drilled off the Irish shore were drilled in the shallow water of the Celtic Sea, therefore they cost a lot less than €70 million. It currently costs at least €70 million for a deep water well off the Irish shore.

Deputy Thomas Pringle:  The figure is €70 million

Mr. Fergus Cahill:  Yes. Production sharing agreements are relatively common in the industry but they usually take place on onshore areas where there is a high probability of success, in other words the Government knows precisely what is there and can estimate costs with considerable accuracy. They are used in places like north Africa and the Middle East where there is a high probability of success. They are not common in deep water, offshore, uncertain, high-cost areas.

Deputy Pringle asked about Mayo.

Deputy Thomas Pringle: I asked about the reputational damage caused by the handling of the construction of the terminal in Mayo rather than the difficulties offshore.

Mr. Mike Murray:  The point we made in regard to Corrib was more general, in terms of infrastructural development in Ireland which has been subject to delays and uncertainties not just in our business but in many other lines of business. The problem that creates is that it makes it very difficult for somebody who is making a decision about investing in exploration to determine, if he or she is successful, how long it will take to get the development on-stream and start producing benefits. It is a negative factor to which we referred in the paper which makes it more difficult to attract investment into the Irish offshore industry.

Mr. Fergus Cahill:  The Kinsale Head development, with which Mr. Murray is very familiar, worked very well uncontroversially and very successfully because there was a considerable amount of interdepartmental co-operation. We suggested to the Minister that he set up a group to study how the model can be replicated for future projects.

On the point raised by Deputy Ferris on why, given that the tax rate has increased, there is increased interest in offshore Ireland, the reason is that the type of licence has been changed by the Department. It no longer obliges people to take out full exploration licences which carry onerous and expensive work programmes. It has given companies two year licensing options which do not carry onerous work programmes; they require a certain amount of work but nothing in comparison to drilling a well.

It is interesting to note that none of the 13 companies which have been offered licences are major companies. They are all very small and will try to do what Providence has done, as described by Mr. O’Sullivan, to work up prospects and try to farm people in to participate.

Deputy Martin Ferris: What about the Wood Mackenzie report?

Mr. John Conroy:  I am not familiar with it. Commercial companies which write such reports have a large team of commercial analysts for all parts of the world.

Deputy Martin Ferris: Can it be made available to the committee members, as legislators?

Mr. John Conroy:  I cannot speak-----

Mr. Fergus Cahill:  A commercial report six or seven years ago identified four hot spots and four cold spots for exploration. Ireland was the first of the cold spots it identified.

Mr. John O’Sullivan:  I will address the point made by Deputy Ferris on the Dalkey drilling. Kinsale Energy, which is part of Petronas, and Providence are involved in that operation. It is an exploratory project which probably has a one in five chance of success and a four in five chance of failure. We have always said finding oil at that location is a risky prospect. If we do and can refine it in Ireland it would be the most advantageous situation.

Deputy Martin Ferris: I want to quote from a website. It states the oil from the Dalkey prospect will be shipped directly from the rig to a refinery in Milford Haven or Rotterdam.

Mr. John O’Sullivan:  Which website is the Deputy quoting?

Deputy Martin Ferris: I am quoting

Mr. John O’Sullivan:  From which Providence Resources website?

Deputy Martin Ferris: I am quoting it.

Mr. John O’Sullivan:  I will need to check the reference. There is some confusion between the Dalkey Island project and the Barryroe project which is currently drilling. Barryroe is a waxy paraffinic oil. There is no refinery in the State which can refine such crude oil. If Barryroe was to go into development tomorrow there would be nowhere in the State for the oil to be landed.

If somebody wants to build a refinery which can treat waxy crude oil, that is fine. If Whitegate wants to expand its refinery, that is fine. We want to source a refinery which is close because it would reduce our shipping costs. It is an economic investment decision. I do not want to ship oil-----

Deputy Martin Ferris: The point I am making-----

Chairman:  There are three other members who wish to speak.

Deputy Noel Harrington:   I welcome the delegations and thank them for the information it provided. Their submissions are very informative and put their points very well. In advance of issuing offers to the industry on licensing, does the industry have any dialogue with the Department on where the licences will be issued to maximise the potential of any finds or resources? Does the Department issue licences which may not be effective or make it less attractive for the industry to drill? Does the industry advise the Department that licences should be issued for certain sites?

The delegation referred to the fact a small area is licensed. Is there dialogue-----

Chairman:I will take the other questions and bank them.

Deputy Noel Harrington: The delegation mentioned it shares information as it becomes available during the effort. That is not all the information that is available; I presume a lot of information is available in advance or on historic basis. Who has the greatest amount of information and how is it shared?

We have a very generous fiscal regime towards the industry. The International Energy Association has an opinion which is in conflict with the Indecon report mentioned by the delegation on the fiscal regime. All I have heard is that the fiscal regime is not obstructing the process, rather it is that the people tasked with trying to find the resource cannot find it. I do not want to be crude but has the industry failed?

Mr. Fergus Cahill:  Jointly and severally, yes.

Deputy Noel Harrington: Some of the comments by the delegations comments were misleading, such as the comment that Ireland is a cold spot or has experienced serious reputational damage. That does not refer to the business environment in general; rather, it is specific to oil and petroleum exploration. It is important to point that out. It is not accurate to say that Ireland is a “cold spot” in terms of the business and corporate environment per se. We do not want the message to go out that Ireland is a risky environment for business in general. That terminology is somewhat regrettable.

What is the industry’s opinion on the future of refining in this country?

Deputy John O’Mahony: Many of the questions have already been asked. I assume the delegates’ recommendation that a regulatory and administrative regime which works must be put in place is based on two grounds - first, that the current regime is not working and; second, that they are going on the experience of the Corrib gas field, which was supposed to be flowing in 2002 but is not yet in operation. In other words, the delegates are arguing that the planning process and so on, as it emerged in respect of the Corrib experience, must be put right. Are the delegates suggesting that in the case of the first such controversial project, the Government did not handle it as well as it should have and needs to learn from that?

The delegates mentioned reputational problems and that companies which might look to drill or explore in this State in the future must be made to feel welcome. Will they elaborate on that? We all may have our opinions on why such companies might not feel welcome. Does Shell believe that it made any mistakes in regard to the Corrib project? Would it do anything differently if the clock could be rewound?

Deputy Michael Colreavy: I thank the delegates for their presentation. I am somewhat surprised at their surprise that there are different views on this issues and what they might refer to as urban myths. The delegates’ job is to maximise income and reduce costs and to do the best they can for the operators in the oil and gas industry. There is nothing wrong with that. Our job, on the other hand, is to protect citizens and our environment and to ensure the State benefits financially from the exploitation of our natural resources. We are looking at this from different perspectives, so there should be no surprise that there are differing views on matters.

Is the Irish Offshore Operators Association open to a tendering environment in which the return to the Exchequer could be linked to the quantity of any extractible oil or gas discovered which is determined to be commercially exploitable? Could the terms of the revenue return to the State be linked to the commercial viability of the find? Will the delegates clarify whether the data that are coming from the rigs is coming online or in real time? If it is in real time, is it a system which has been verified and licensed to link to an automatic measurement and reporting system? If so, do those data feed into any other information systems or is it a case of somebody looking at a measurement somewhere, transcribing data and sending it off online? If it is done in real time, what verification process is within the software itself and is that verification process supervised by the Department?

It is no surprise that there is distrust on this issue. We want to maximise income to the State, prioritise safety and ensure the citizens of the State get the best deal. The delegates want the best deal for their shareholders. It is inevitable that we would have different interests.

Senator Trevor Ó Clochartaigh: I thank the delegates for their detailed presentation. They present a rather bleak picture and have indicated that the companies they represent are in difficulty. Our role is to frame a licensing regime that is fair to everybody. In that context, it would be useful if the delegates were to provide details on the extent of profit made in recent years by the companies represented by the association in respect of their Irish-based activities and the extent of the tax write-off they have received from the State in each of the past five years. They might also indicate the average remuneration package for executives based in Ireland. It would be helpful to see how that sits in the current economic context and given that any decisions taken by the Department must be gauged within an overall budgetary picture. I am not asking for a specific company’s private profits, but I would like to know whether the association has amalgamated the figures on profits on Irish activities, the tax write-off on exploration costs and so on in recent years, and the average remuneration of Irish-based executives.

Mr. Fergus Cahill:  Deputy Ferris referred to the lack of jobs on oil rigs. We prefer to take the longer view in this regard. Jobs on oil rigs are transient by nature because there is very little activity in Ireland. Even if people were to secure jobs on rigs they would not be able to spend their career in Ireland because we do not have a critical mass of drilling to support that. More important - and the Deputy acknowledged this - the two developments that have taken place to date, in Kinsale and Corrib, have provided significant employment. If he wishes to visit Cork, he can talk to 50, 60 or 70 Irish people who have been employed full-time in the gas industry for more than 30 years. These are real jobs. The project in Kinsale supports direct investment in Cork and also supports a large number of smaller companies which provide services on an ongoing basis. Those are the jobs we should be looking at. The key is generating development and the key to generating development is to increase the rate of exploration. That is one of the main messages we are seeking to convey.

Mr. John Conroy:  In regard to supporting activities, we heard individuals from Killybegs talking about this on the radio in recent days. There are figures and statistics in this regard in our submission. Substantial benefits have come to an area that would otherwise not have come. We have people trained almost to an international standard in their expertise in regard to offshore operations. There are many indirect benefits arising from the large construction project at Corrib and they will continue for several years to come. There is a great deal of indirect investment around these projects.

Deputy O’Mahony asked whether there is a feeling that companies are not made welcome here. That is not quite right. It is about success. The industry works like any other in that when a company is successful in terms of exploration and development other companies get involved. That is the nature of the industry. We could perhaps do with a much more streamlined regulatory and planning system along the lines referred to by Mr. Cahill, namely, a senior departmental official with responsibility across all Departments with various responsibilities in respect of large infrastructure projects. This is not only an oil and gas industry. EirGrid’s views in regard to licensing, foreshore licensing, planning and so on are often heard across industry. The geological risk and the lack of tangible success has perhaps led to a fall-off of the major oil companies that are exploring in other parts of the world.

Mr. John O’Sullivan:  I will respond to some of Deputy Harrington’s queries. On his question in regard to dialogue, we hold regular IOOA-PAD liaison meetings in relation not only to licensing, but environmental, HSC permitting and so on. Agendas for our meetings with them usually include ten topics, one being future licensing rounds and recommendations. We set recommendations before them, some of which they take on board and others they do not. We engage in dialogue and offer recommendations. It is then up to them to use them as they will.

On sharing information, the companies, when finalising acreage assessment, provide a full relinquishment document which includes all relevant data. As such, a subsequent licensee who picks up the acreage can access all that information. For instance, in the case of Barryroe, a project we are currently running off Cork, we are the beneficiaries of a couple of hundred million dollars worth of investment by Esso and Marathon. The job of Providence Resources, and that of its partners, is to make a commercial development of that using new technology in a higher oil price environment and so on. We are keen to ensure information is shared because we are picking up some of the legacy discoveries such as Spanish Point and we want access to as much information as possible in order to make our decisions.

The Deputy asked whether the fiscal regime is overly generous and if the industry has failed. Mr. Cahill referred to what happens when one drills 140 or 150 wells and gets only four developments. If something has failed in the petroleum system, either the hydrocarbons do not exist or we have not drilled wells in the right place. The industry view is that we need to run more wells. The west coast is a big area, which has potential because of large undrilled areas. As regards Ireland being a “cold spot” specifically to the oil industry, I would hope as a resident and taxpayer in the State that Ireland is not being tarnished based on the oil industry perception. I always try to warm up Ireland as a place for investment from multinationals.

Mr. Cahill has a great deal of experience in the refining area and might like to comment further on that.

Mr. Fergus Cahill:  I wish anyone currently wanting to build a refinery in Ireland the best of luck because refining in Northwest Europe has consistently lost money during the past 50 years. The market in Ireland for petroleum products is not large enough to support a large refinery. Light sweet crude oil found off the south coast will without doubt go in Whitegate because that is the nearest place. If heavy waxy crude is found, it will have to be sent somewhere else.

I would like to respond to the question in regard to the association. However, before doing I will ask Mr. Murray to respond in fiscal terms to Deputy Colreavy’s question on tendering.

Mr. Mike Murray:  Deputy Colreavy asked if it would be possible to put in place a tendering system where the return was linked to the quantity of extractable oil or gas, which is akin to the royalty system which was in vogue many years ago and comes from southern American practice. The Department followed the lead of the UK and Norway in dropping in royalties, the reason being that it was seen as a disincentive. A royalty based system takes no account of how difficult it might be to develop a field or the cost of doing so. Whether doing so is easy or hard one pays the same. The current system, which is based on taxation in terms of the returns the companies get, is a more equitable system because it reflects the cost of developing something.

As stated earlier, that taxation system - the 25% corporation tax rate - is administered in accordance with the corporation tax rules which apply to all other foreign direct investment in Ireland. An INDECON report of a couple of years ago included an extra feature which reflects to some extent a recognition that more profitable fields can contribute more to taxation. We do not believe the royalty system or one based purely on quantity of product is fair. It may be a real disincentive in Ireland because of the high costs involved, in particular the cost of drilling a well and developing something, if lucky enough to find it. There is a high cost barrier which one must first get over before one starts generating a return. This speaks to Senator Ó Clochartaigh’s question about the tax write-offs. We referred earlier to the amount of money spent on exploration drilling here over many years. There is no tax write-off because there is no income against which to write-off tax. One cannot get a tax benefit unless one has an income. As such, the €3 billion spent is dead money.

Senator Trevor Ó Clochartaigh: So the company did not get anything back in tax.

Mr. Mike Murray:  No. The Irish Government does not subsidise the cost of exploration drilling. As Mr. Cahill stated, Norway does but Ireland does not. It would be unsatisfactory if in the current climate the Irish Government was saddled with an additional bill of €3 billion for exploration drilling which resulted in 140 dry holes.

Mr. Fergus Cahill:  On the question-----

Chairman:  We must wrap up soon on this issue.

Mr. Fergus Cahill:  On the question about senior executives in the association, there are none. There is one part-time executive, myself. I would hate to tell Members how little I am paid.

Senator Trevor Ó Clochartaigh: My question relates to companies that are members of the organisation.

Mr. Fergus Cahill:  It would be difficult to obtain that information. It is like any other a competitive industry. People are paid the market rate.

Chairman: I thank the witnesses.

Deputy Michael Colreavy: Perhaps the witnesses could respond to my question in regard to real time data. Is it an automatic part of production or is it hard coded into a system? Also, is it verified by the Department of Agriculture, Food and the Marine?

Chairman:  I think that question was answered during the response to Deputy Harrington’s questions.

Mr. Mike Murray:  I did answer it earlier. In terms of production data, the data is transmitted every day to the Department.

Deputy Michael Colreavy: Is the information inputted or is it generated by the process?

Mr. Mike Murray:  The report which we generate internally is copied to the Department.

Deputy Michael Colreavy: So a person inputs-----

Mr. Mike Murray:  The same report which I see on my desk each morning is seen by a person in the Department.

Deputy Michael Colreavy: It is not an automatic by-product of the production system - a person inputs the data.

Mr. Mike Murray:  No.

Mr. John Conroy:  There are combinations of ways of doing it. Summary reports would be created by a person on the rig. That is what Mr. Murray is referring to.

Mr. Mike Murray:  Reporting is automated.

Mr. John Conroy:  Most of the data one gets to analyse is automated. It is a stream of data that comes from the tool down hole. It is not manipulated in any way. A geologist in the Department might interpret data, which is squiggles and so on which one needs training to understand, differently than me based on my experience having looked at thousands of wells.

Deputy Michael Colreavy: I understand there can be differences in interpretation.

Chairman:   I advise Members to reference Mr. Murphy’s response to that issue when he appeared before us. I am not taking sides, but Mr. Murphy, who worked on rigs and is a geologist, was adamant that he was aware of anything that was going on on rigs. As we have gone over time and the SIPTU representative have been waiting, I am anxious to bring this to a conclusion. I thank Mr. Cahill and his colleagues for their contribution. If we are to develop an indigenous oil and gas industry, what has been highlighted is the need to have a dedicated cross-departmental unit working with the Department of Communications, Energy and Natural Resources and the industry.

In the previous Dáil, the Committee on Climate Change and Energy Security worked on producing a foreshore licensing Bill, which was a useful start. We should be alert to the issues such as Airtricity, the wind energy companies, Bord Gáis and so on raised by Mr. Cahill. As we formulate a report we should consider what to include in it.

Mr. Fergus Cahill:  I thank the Chairman and members of the committee for their time. It is good that we have reached agreement on one point.

Sitting suspended at 4.11 p.m. and resumed at 4.15 p.m.

Posted Date: 
28 November 2011