Vol. 387 No. 3
asked the Minister for Energy the number of exploration and appraisal wells likely to be drilled in Irish waters during 1989; the number of companies involved; the latest information available to his Department on a possible commercial oil or gas discovery; and if he will make a statement on the matter.
36.
asked the Minister for Energy if he has any plans to change the terms for offshore exploration following the 1988 drilling results.
I propose to take Questions Nos. 6 and 36 together.
I expect at least four wells to be drilled in 1989 involving three exploration companies. I am hopeful that additional exploration wells may also be undertaken but the drilling of any of these will depend in the first instance on the evaluation of seismic surveys completed by certain companies. The drilling of any appraisal wells will depend on the results of exploration drilling.
No commercial oil or gas discovery has been made to date apart from the Kinsale Head gas field. While accumulations of oil and deposits of gas have since been identified by offshore exploration activities these have not been regarded as commercial because of insufficient reserves and low oil price.
I have no plans to revise the offshore licensing terms announced by my predecessor in September 1987.
Will the Minister say where the four wells are expected to be drilled? The Minister in his reply said that no viable discovery had been made. Is the Minister satisfied that no economically viable discovery has already been made? Is the Minister taking into account current oil prices? What reason has the Minister for being so clear in his statement that no viable discovery of oil has occurred?
The four wells will be in the Celtic Sea and Porcupine — 49.9, 48.20 and I do not recall offhand the reference for the other. They may well depend on certain seismic operations. The evidence available to me and to the Deputy indicates that while there was one fairly major find of oil, its discovery in such deep waters made it less than a commercial find in the context of present oil prices and in the context of current technology.
Is the Minister satisfied that the level of drilling in the early eighties was 50 per cent higher than he now projects for 1989, given the major change that the former Minister made in the terms, which effectively rule the Irish public out of any royalty or stake in an oil find? In view of all that, is the Minister happy with that level of drilling?
As the Deputy knows, the terms which have been agreed by the Government on this matter are not harsh but they also have some significant strengths. When the Deputy refers to 1980, it would be scarcely judicious——
I referred to the early eighties.
——to take 1980 as a comparison. The change in oil prices since the early eighties has obviously changed the whole face of exploration. Without the change which was made in 1987 it is extremely unlikely that the level of drilling which is now considerably better than it was, but which is not anything like we would want it to be, would be taking place.
The Minister must be very disappointed at the very small number of wells planned for this year. The Minister mentioned the Celtic Sea. There are three wells there which I presume are gas wells arising from the recent deal with Marathon.
The Deputy cannot presume that it is gas.
I am presuming that that is what is happening and that the only exploration for oil that might take place is in the Porcupine. The Minister mentioned that even though the terms that were revised in September 1987 were generous, the level of exploration has fallen off considerably and he indicated that that had to do with the low world prices for oil. As the Minister is using that as a reason for the lack of activity, will the Minister say what price a barrel of oil would have to go to, before exploration activity is likely to pick up and a commercially viable exploration is likely to take place?
We could debate this for the whole afternoon.
The Minister must have some idea.
I gave as one reason the current oil prices which would have to be a factor. Of course, there are other factors, for instance, the level of expenditure so far in exploration and the results of that exploration. There are quite a number of factors that would have to be taken into account. We have four positive developments and we will do all we can to encourage others. Let us be somewhat more optimistic.
In the event of a major oil find would the Government be able to alter the terms now applying to such a find or must the public stay with the situation where there is to be no royalty or stake in such a find?
We would be very happy to have an oil strike. The Deputy is completely wrong, when we are trying to get more drilling, to speculate on immediate changes in terms for licences in the event of a discovery. If there was anything that would deter exploration it would be that shifting sand policy which the Deputy seems to want to put in place.
I just asked a question.
The Minister is giving the impression that he would change the terms if there was an oil find.
Can we please get to Question No. 7?
