asked the Minister for Energy if any further oil or gas strikes have been reported to his Department since the announcement of new exploration terms in September 1987; and if he will make a statement on the matter.
52.
Ceisteanna — Questions. Oral Answers. - Oil and Gas Exploration.
18.
asked the Minister for Energy the latest information available to him on the commerciality of the gas discovery by British Petroleum in Block 48/18a; if the State has made an offer to buy gas from the developers; and if he will make a statement on the matter.
I propose to take Questions Nos. 18 and 52 together.
The present position in relation to the 48/18-1 gas find is that the discovery has not yet been declared commercial. However, I understand that it might be possible to establish commerciality by the successful drilling of further exploration wells in the vicinity of the discovery.
In order to secure the drilling of these walls, I have outlined to the licence consortia concerned, through their operator BP, certain terms relating to production of gas in the event of a successful drilling programme leading to a development in the licensed area. The Deputy will appreciate that it is not open to me to release details of these terms which have been negotiated on a strictly confidential basis.
There have been no oil or gas finds since September 1987, but this is hardly surprising in view of the fact that the 1988 drilling season has only just commenced.
Will the Minister indicate why he considers it necessary to keep secret the arrangement being offered to the companies who are drilling and who will be extracting whatever gas or oil finds they make? After all, the resources which they are being asked to locate and bring ashore are owned by the people of the State. Surely we are entitled to know the terms on which these finds will be sold or given away?
The Deputy will appreciate that in the context of contracts of this kind, going back over a long number of years, negotiations between Governments and private companies not just in this area but in others, confidentiality has always been upheld for good sound commercial reasons and in order to attract private companies into this whole area. It seems that very often in breaking away from that tradition we would militate considerably against the potential development of that resource.
Does the Minister consider that the new licensing arrangements which have been offered to companies have resulted in increased activity in relation to the search for gas and oil and that the terms being offered will encourage the bringing ashore of whatever finds are made?
That is the whole purpose of the exercise — to be able to develop this resource for the country. The indications are that there has been a considerable upsurge in interest and that upsurge in interest should ultimately lead on to the point where development of these resources can take place. While there has been an upsurge in interest, it will be a long time before we see any real developments.
In view of the state of the market for oil and gas at present and of the fact that it is highly unlikely that the commercial companies, the multinationals in particular, will be keen to bring ashore any finds unless they are extremely large, will the Minister of State agree that some new approach needs to be found which would lead to bringing ashore the oil and gas that has already been found which would be to the benefit of the country and not necessarily the huge multinationals carrying out the searches?
I share the Deputy's concern on this matter. Obviously, the multinational companies will not make shortterm decisions as the effects of any decisions made will be felt over a long period. Where they are satisfied with the conditions being offered, I cannot accept that they will not proceed with extracting and bringing ashore the oil as quickly as possible. That is what we hope will be achieved.