I should like to draw the Minister's attention to Question No. 27 and ask him to confirm, or deny, that the position given the abolition of royalties and taking into account the price of oil, the tax allowances which can be quite extensive under the taxation regime for exploration and the exploration costs which will have accumulated before an oil discovery of a commercial size, is that if a commercial discovery of 15 million barrels takes place the net effect will be that the State will get absolutely no return? Given those factors and the write-off that the oil companies are now entitled to claim will the Minister accept that the abolition of royalties which guaranteed a direct income to the State, and to the people who are entitled to a return from oil, has meant that that was a complete mistake?

The contrary is the position. I have outlined for the Deputy the scenario we face in regard to our competitors in Europe for scarce exploration funds. The Deputy makes the point that exploration write-offs are now allowable. They were allowable after 1986. The difference now is that development can be also included, but the question dealt with exploration. On the question of royalties, the royalty formula after 1985-86 was such that there were minimal royalties on small fields anyway at around 3 per cent. I am quite sure that the radical measures which I propose will have the desired effect of bringing forward an intensive exploration programme over the next few years. If the oil is there it is hoped that it will be discovered after 20 years of exploration.

I want to bring in Deputies Mac Giolla and Pat O'Malley who have questions tabled also on this subject.

Will the Minister not agree that he has been hopelessly outmanoeuvred by the oil companies? His announcement came after quite a long concerted campaign by the oil barons, some of whom have newspaper interests, to persuade him and the public to surrender to their demands. They were saying "The State wants money from us. We will do this work if the State takes nothing". The Minister has told them to do the job, that nothing is wanted. Those are the facts on the tax issue as well as the royalties issue. In the Porcupine Belt area very expensive exploration costs can be claimed over as many years as is wished because of the depth. In the Celtic Sea area because of the likelihood of there being quite a number of small wells rather than any one large well, a similar process can be implemented so that there will be no tax. The Minister has been out manoeuvred.

I totally reject the suggestion of being outmanoeuvred by the oil companies or by anybody else on this issue. The approach that the Government and I as Minister for Energy have taken is totally practicable in a situation which we have inherited of practically no drilling or exploration programme other than what I have outlined to the House. It is a nice ideological argument about the 100 per cent of take that Deputy Mac Giolla would like to see, but 100 per cent of nothing is still nothing. That is the case unless one goes and finds the oil, which is what we are trying to do and are determined to do. If there is a find, which I hope there will be, in the Porcupine Belt — and I am delighted to see BP out there in water depths which have not been attempted in the Irish scenario before — I hope it will be a substantial find. If that is over 100 million barrels, the State take is at 60 per cent, taking account of the write-off for exploration and development.

Sixty per cent of nothing is still nothing.