Representatives of the oil industry have said many myths exist around the industry in Ireland.

Chairman of the Irish Offshore Operators' Association Fergus Cahill said the idea that the coast of Ireland was 'a fat goose ready to be plucked', in exploration terms, was not true nor were there queues of oil companies hoping to explore.

He was speaking before an Oireachtas committee.

He said 3% of the coast was under exploration, a figure that would increase to 5% if the recent round of 13 licences awarded are proceeded to exploration.

He said the Irish coast was a high-risk, low-return environment for exploration companies, many of whom lost large amounts of money by investing in projects in Ireland.

Mr Cahill said comparisons with Norway were not valid as the chances of a strike were significantly greater there.

On the 78% tax rate on finds in Norway, he said there was a corresponding 78% return for those who had not struck oil.

Director of Providence Resources John O'Sullivan said most of the companies involved in exploration off the coast were small companies and large multinationals.

He said the majority of Irish wells have failed and that companies had 'dismal' exploration record when it came to the Irish coast.

Fianna Fáil's Éamon Ó Cuív asked what percentage of high potential areas were under licence.

He expressed concern that oil could be discovered in Irish waters but brought elsewhere for processing to avail of more favourable tax regimes.

Sinn Féin's Martin Ferris said if companies were losing money it was puzzling as to why there was increased interest off the Irish coast.

Citing figures from the UK and elsewhere, Mr Cahill rejected this assertion.

Addressing the committee, Jack O'Connor of SIPTU said there were an estimated 6.5 billion barrels of oil and 20 trillion cubic feet of gas beneath the seabed off the west coast of Ireland.

However, Mr O'Connor warned that "significant changes" had been made to the licensing terms for exploration since the 1970s.

"In 1987, royalties and State participation were abolished and in 1992 the corporate tax rate was reduced from 50% to 25% ... In Ireland tax can be written off against the costs of exploration, development and close-down of any field."

He said that as a consequence, the State’s current approach to the management of its resources means Ireland has one of the lowest returns from its oil and gas resources anywhere in the world.

"We recommended in June that it would have been preferable to delay the issuing of the 13 exploration licensing options awarded in the Atlantic margin licensing round in mid-October or any other exploration licences until this committee had completed its review of the licensing and fiscal arrangements. However, the Department decided to press ahead.

Mr O'Connor called for changes in the licensing terms "which might include the imposition of royalties, State equity stakes and increased taxes."