Vol. 429 No. 6
32 Mr. Noonan (Limerick East) asked the Minister for Transport, Energy and Communications if any offshore oil drilling will take place between now and the end of 1993; if so, if he will give details of the locations of such drillings; and whether there is any increase in drilling activity attributable to the changes in the relevant law introduced in the Finance Bill, 1992.
Two wells are planned to be drilled in our offshore area during the 1993 drilling season. Aran, in partnership with Mobil, plan to spud a well in block 50/12 in the North Celtic Sea in the summer of this year, depending on rig availability. Marathon will also drill a well before the end of the year. The specific location of this well has yet to be decided by the company.
The provisions of the Finance Act, 1992, relating to petroleum exploration together with revised licensing terms for oil and gas exploration and development which were issued in November 1992 are designed to attract additional exploration investment to Irish waters. At this stage it is too early to see the effects of these changes in terms of exploratory drilling but it is significant that three new licences have been agreed with groups of companies to explore in our offshore area. Each of these licences will involve a commitment to drill one exploration well during the first phase of the licences and further wells if the acreage is retained.
Since last year, there has been a considerable increase in the volume of inquiries to my Department from oil companies who are looking towards Ireland as an exploration location. The industry has given a positive reaction to both the tax revision and the new licensing terms and the indications are that this new regime has been favourably received. We are confident, therefore, that in time we will see an even greater increase in activity as a result of these new measures.
(Limerick East): May I take it from the Minister's reply that there is no noticeable increase in activities since the legislation was drafted by Deputy Molloy when he was Minister for Energy and introduced by Deputy Ahern as Minister for Finance in last year's Finance Bill? Now that the Minister has charge of this portfolio, has he any plans to introduce amending legislation which would be more attractive to exploration companies?
Deputy Noonan was not listening to what I said.
(Limerick East): I was listening.
Those measures were introduced last November and we are now in the spring of this year. We are optimistic that, following the new measures effective from last November, there will be a positive response from a number of companies this year and subsequent years and we will review the matter at the end of this year.
(Limerick East): Did the Minister say two wells will be explored in this drilling season? Will he agree that this is less than the activity in previous drilling seasons prior to the introduction of the new legislation? May I take it then that the new legislation has been unsuccessful and that it is time for the Minister to consider amending that legislation with a view to attracting more activity even though the legislation has only recently been passed?
There was a complete downturn in the whole international exploration operation in the past three years. Given that two wells will be explored this year the position is 100 per cent better than last year and we are very optimistic in regard to the future.
May my Question No. 14 be re-entered for oral reply?
