Cheaper fuel at the petrol pumps could become a reality for Irish motorists if the giant US corporation, Tosco, assumes ownership of the Whitegate Refinery in Cork Harbour and the Whiddy Island storage facility.
Speaking to The Irish Times last weekend, the Minister for Public Enterprise, Ms O'Rourke, said that while the Government hoped the proposed $100 million deal would lead to a reduction in fuel prices to the consumer, the reduction could not be quantified at this stage of negotiations between the Irish National Petroleum Corporation Ltd (INPC), which holds the assets in ownership for the State, and Tosco. Ms O'Rourke added that many facets of the tentative deal remained to be explored before ownership was transferred.
At this point, the Government, through the INPC, and Tosco corporation have signed a "heads of agreement" document. For Whitegate, the only refinery in the State, and for Whiddy Island, which once knew heady days as the centre for Gulf Oil's transshipment operation into Europe before the Betelgeuse tanker disaster in 1979 and virtual closedown, this most hopeful move in decades is being watched eagerly by the workers in both facilities.
Within the next few weeks, a "due diligence" team from Tosco will arrive to begin what amounts to an audit of the facilities of Whitegate in east Cork and Whiddy Island, near Bantry in west Cork.
The early signs are hopeful for two reasons. Even at the "heads of agreement" stage, Tosco indicated that the successful conclusion of a deal would have no adverse implications for jobs at either facility, and the corporation has also said that if the deal goes ahead it will commit itself to operating both Whitegate and Whiddy for 15 years and to establishing its European headquarters in Dublin. Job guarantees spanning 15 years are not common in the oil industry just now.
But as the Minister explains, much work remains to be done: "I believe the completion of a deal would be wonderful for the Cork region. The oil industry is an uncertain one and it has not always been easy for a small refinery like Whitegate to hold its own against the might of far bigger and better resourced players.
"Whiddy, after the awful tragedy of 1979, has had a very uncertain future. I know that the previous government had various musings on the role of the INPC and its assets and when I took over the brief, I felt we should seek to engage the attention of a large company. "We asked the INPC to go about this and to their credit, they carried out a very thorough investigation involving more than 30 companies that might have an interest in acquiring the assets. I must stress, however, much work remains to be done."
Ms O'Rourke said the Government would give priority to the question of jobs. Tosco had given an early commitment and the negotiators on the Irish side would want to copperfasten the offer. Furthermore, an environmental audit would have to be carried out to define precise areas of responsibility once the operation of the two facilities had been handed over.
From the Government's perspective, she added, a more tricky question concerned the future of the National Oil Reserves Agency (NORA), one of the INPC's three subsidiaries and the only element not on offer as part of the deal. NORA's brief is to ensure the State meets its international obligation to maintain strategic oil reserves equivalent to 90 days' consumption.
With the future of Whitegate assured, as it would be if acquired by a huge corporation like Tosco, NORA might have to plan its future in a different light. That is another matter to be resolved in the coming weeks, although it doesn't directly concern the negotiations at hand.
At present, each oil importer in the State is required to take 20 per cent of its volume from the INPC, namely Whitegate. This is the mechanism by which the Government ensures Whitegate's continued viability and is justified because of the strategic need to have a refinery on Irish soil.
It goes without saying that the cost of maintaining the mandatory regime, as it is known, is passed on to the Irish consumer. If Tosco, or any other oil corporation, becomes the new owner, the mandatory regime would cease, and that's where the tantalising prospect of somewhat cheaper fuel arises.
Tosco would bring new economies of scale to the operation and new efficiencies. The result could only be of benefit to the consumer, but the extent of the savings remains to be calculated as part of the total deal. Mr Neasan O'Shea, the INPC's business development manager, believes the savings will not have people jumping up and down at the petrol pumps.
Together, Whiddy and Whitegate employ some 220 people. Whitegate was opened in 1959 and the Whiddy terminal was opened by Gulf in 1968. Over the years, various tranches of Government funds have been injected to keep both facilities operational.
Few who witnessed the burning shell of the Betelgeuse oil tanker in Bantry Bay on January 9th, 1979, after the explosion which cost 50 lives, will forget the awful spectacle. Since then, the future has at best been precarious and the Gulf Oil presence is only a memory. It could be that better days are just around the corner.