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Dáil Éireann debate -
Tuesday, 8 Dec 1998

Vol. 498 No. 1

Written Answers. - Offshore Exploration.

Bernard J. Durkan

Question:

112 Mr. Durkan asked the Minister for the Marine and Natural Resources the most recent results from oil, gas or other mineral exploration works; the proposals, if any, he has to improve or enhance the attraction of investment in this area; and if he will make a statement on the matter. [26785/98]

Bernard J. Durkan

Question:

113 Mr. Durkan asked the Minister for the Marine and Natural Resources if he has received any new and promising indications from oil, gas or other mineral explorations taking place; and if he will make a statement on the matter. [26786/98]

I propose to take Questions Nos. 112 and 113 together.

As regards offshore petroleum exploration the most recent results are those available from the well drilled in block 18/20 off the coast of Mayo. The position in regard to the outcome of that well is as outlined in my reply to the Deputy's question on 4 November 1998.

As the Deputy is aware, since Kinsale was discovered in 1971 and brought into production in 1978, apart from Ballycotton we have had no oil or gas discovery which has been brought into commercial production. Despite the considerable efforts to develop the Connemara field last year the licensees were unable to do so, but on the positive side I am encouraged with the flow rates from the Corrib this year. Also this year, I have granted a lease over the Helvick field and a plan of development for the field is being prepared.

There are three factors which influence companies when considering investing in an area — price, prospectivity and terms. The price obtained for oil and increasingly gas is set internationally and is outside my control. We promote our offshore prospectivity by encouraging data acquisition and by making data available to exploration companies. The one factor entirely within my control is the terms under which a discovery is exploited and these, together with the tax terms, were revised six years ago following the dramatic decline in interest in our offshore. These revisions have been successful in that they attracted the industry back to Ireland and we now have a high number of licences in place.

However, with the current low oil price, it will be difficult to maintain the current high level of interest, but there is virtually no scope to further improve the terms to attract additional exploration investment and I do not propose to make any proposals in that area.

As regards exploration for other minerals, I have not received any new and promising indications since answering the Deputy's question on 4 November 1998. As I said on that occasion a decision on whether or not indications are promising is a commercial assessment to be made by the holder of the relevant Prospecting Licence. A positive decision would lead to an application to me for a State mining facility in parallel with applications to the local authority for planning permission and to the EPA for an integrated pollution control licence after preparation of an environmental impact statement and a fully worked out plan including sources of finance. Any such application to me is subject to public advertisement and consultation before I make a decision.
As to the incentives for investment, this area is under constant review and I am satisfied that, in spite of a downturn in investment world-wide, we have increased the real value of exploration investment in Ireland and also continue to attract new companies.
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