Vol. 392 No. 7
asked the Minister for Energy the exploration and development which is taking place for oil or natural gas in Irish waters; the steps which he is taking to encourage further exploration and development, and if he will make a statement on the matter.
29.
asked the Minister for Energy the number of exploration and appraisal wells drilled in Irish waters during 1989; the number of companies involved; the latest information available on the results from these wells, and if he will make a statement on the matter.
32.
asked the Minister for Energy the exploration and appraisal wells which will be drilled in Irish waters during 1990; and if he will make a statement on the matter.
I propose to take Questions Nos. 8, 29 and 32 together.
Four exploration wells have been drilled to date in 1989, all in the Celtic Sea. Three exploration companies were involved. One further exploration well is expected to be commenced shortly by one of these companies. Three of the wells drilled have been plugged and abandoned as dry holes. One well drilled by Marathon discovered gas which flowed on test at the rate of 29 million cubic feet per day. An appraisal well to determine the extent of the reserves present has also been drilled.
An evaluation of the gas find has been carried out by Marathon who have considered it sufficiently encouraging to commence preparation of a development plan for the field. Preliminary discussions on this are currently taking place with my Department.
I expect that at least four exploration wells will be drilled in 1990. 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 being completed by certain companies. The drilling of any appraisal wells will depend on the success of one or more of the exploration wells.
With regard to the question of encouraging further exploration, my Department is engaged in discussions with various oil exploration companies on an ongoing basis, and it avails of these opportunities to promote further interest in our offshore. Promotion of technical data is also carried out and made available to interested companies. Scientific studies on the geology of the different basins in our offshore are also undertaken and published.
May I ask the Minister to indicate to the House the estimated reserves in the Marathon discovery which he indicated flowed at 29 million cubic feet per day? May I further ask him whether he is satisfied with the level of exploration, in particular for oil, and does he feel that some concession to bring home the oil discoveries already identified but thought to be non-marginally commercial should be made by the Government in order to establish Ireland as an oil producing country rather than a prospective territory?
I am not free to disclose the estimated quantity in the Marathon second find. The matter is still at discussion stage between the company and the State and it would not be appropriate or correct from a commercial point of view for me to do so. Naturally, I am not satisfied with the level of exploration for oil, and this is due to a number of factors. As the Deputy knows a lot of wells have been drilled and the results to put it mildly, have not been very exciting so far. These shows of oil have been in areas where it would be quite expensive to extract the oil. Happily, the price of fuel oil internationally is considered to be low at present and this affects the economics of large investments to extract oil where it is expensive to bring it ashore. It would be my hope and wish to attract continued exploration programmes for oil as well as for gas. My predecessor introduced new terms which are considered to be very reasonable and compare very favourably with the terms available in north-west Europe. At this point in time I do not see the need to revise the terms but I do not mind telling the Deputy that I will certainly keep an open mind on this.
I would not suggest to the Minister that he should revise the terms, which I do not think are very satisfactory from an Irish point of view, but I would ask him to consider the notion of a first home concession for oil so that we could establish ourselves as a producing country. I think much of the difficulty lies in the fact that no commercial oil has been brought ashore and this results in Ireland being struck off the map so far as prospectors are concerned. Perhaps a first home concession, which should be very cheap to grant, might alter this position.
As I said, I am very anxious to do whatever I can to encourage higher levels of exploration and any suggestions or ideas which are made in the House or elsewhere will certainly be seriously considered by me and I will have them fully examined. As I have said, I will keep a very open mind in relation to this whole area.
The Minister used the argument — I have heard it used frequently before — that exploration is not ongoing at the moment because of the low price of oil——
Among other things.
It strikes me as a false argument, because it is not the price of oil which is relevant now as to whether or not it should be explored for; it is the price when it comes ashore. What the Minister really needs to determine is the price in five years' time. That is what dictates whether or not exploration should be carried out at present, and not the price of oil now. Is that not correct?
One of the reasons which is understood to be valid as to why some of the oil shows which have appeared off our coasts have not been followed up by the companies is that it is not economical to do so in present circumstances. As well as that, the technology is not yet there to take it from the depths and the locations where it has been found.
