Gerry O'Sullivan
Question:13 Mr. G. O'Sullivan asked the Minister for Energy if he will make a statement elaborating on recent comments by him concerning oil and gas finds.
Ceisteanna — Questions Oral Answers. - Oil and Gas Finds.
Gerry O'Sullivan
Question:45 Mr. G. O'Sullivan asked the Minister for Energy the plans he has for relaxation of the taxation and other regimes relating to oil or gas exploration; and if he will make a statement on the matter.
Tomás MacGiolla
Question:72 Tomás Mac Giolla asked the Minister for Energy if he will outline the information available to his Department regarding the oil and gas discovery in the Celtic Sea, announced by Marathon on 4 May 1990; and if he will make a statement on the matter.
I propose to take Questions Nos. 13, 45 and 72 together.
The confidence in the potential of the Irish offshore for new oil and gas discoveries which I have indicated recently to the press and elsewhere emanates principally from the fact that a reasonable level of exploration activity, including drilling, is continuing here. Clearly the oil companies would not be investing large sums of money in exploration unless they believed that commercial finds of oil or gas would result. I expect the drilling of six exploration wells to be completed before the end of this year. Apart from this, the potential for drilling new prospects and for developing existing accumulations, hitherto deemed sub-commercial, is being evaluated.
As I indicated to the House on 28 March, I have no plans to change the terms applying to oil and gas exploration. The new measure to enable Irish operators of support vessels to the petroleum exploration and production sector to benefit from the 10 per cent corporation tax rate provided for in the 1987 Finance Act in respect of other categories of seagoing vessels, does not involve any change in the terms applying to oil and gas exploration and production companies.
A formal statement on the results of well 48/24-3 was issued by Marathon, the operator of the well, on 4 May 1990. The well was drilled to a total depth of 8,475 feet. It was spudded on 16 January 1990 and was temporarily plugged and abandoned on 30 April 1990. The well was tested and produced oil at a flow rate of nearly 1,620 barrels per day on a half-inch choke. Gas was also produced at a rate of about 5.4 million cubic feet per day. As with all wells drilled, my Department have been provided on a confidential basis with a full set of data from this well.
I appreciate that a certain amount of confidentiality must be applied to any results from exploration particularly off the south coast and I share the Minister's optimism of such finds. Is he optimistic that any new finds would create badly needed jobs in an area which is in need of jobs? Is he as optimistic about the jobs as he is of the discovery of new gas and oil fields?
As Minister for Energy I see my role as seeking to establish the highest possible level of exploration in the Irish offshore. The programme of six wells being drilled this year is reasonably satisfactory particularly when one looks back over previous years. I am anxious to see a much higher level of exploration achieved in the Celtic Sea and in the Porcupine Continental Shelf area in general. I cannot state that there will be a commercial find but I am optimistic that there will be a commercial find. There is a difference between being optimistic and making flat statements which would result in jobs. I see my role as increasing the level of exploration because the more exploration that takes place the better the chances of making a substantial commercial find.
In regard to the announcement of the Marathon find, can the Minister give some explanation of his assessment of oil produced at a flow rate of 1,620 barrels per day on a half inch choke? What does that mean? Does it mean that if it was an inch choke the flow of oil would be twice as much? Is this good or bad? Is the depth unreasonable? Could it possibly be economic? That is the kind of information we want for lay people.
The champagne corks were not popping in the Department when we got the news. The statement issued by Marathon did not indicate that this was a commercial find.
I would like clarification on one point in the Minister's reply. When he indicated that there was no change in the offshore terms, does that mean that his recent announcement that exploration costs could be offset against other income of exploration companies does not apply to the oil sector?
That statement applied only to minerals; it did not apply to offshore exploration.
Question No. 14.
Having said that the champagne corks were not popping, nevertheless, the information obtained would encourage further exploration.