Vol. 506 No. 6
17 Mr. O'Shea asked the Minister for the Marine and Natural Resources the number of exploration licences issued for oil or gas exploration in 1999; the number of exploration wells expected to be drilled; and if he will make a statement on the matter. [16015/99]
38 Mr. Broughan asked the Minister for the Marine and Natural Resources the number of exploration licences granted for Irish waters to date in 1999; his assessment of the exploration prospects in 1999; and if he will make a statement on the matter. [16010/99]
I propose to take Questions Nos. 17 and 38 together.
The position remains broadly as I set out in replies to similar questions on 13 May 1999. To date in 1999, two petroleum exploration licences have been granted in the Irish offshore, one to Agip Ireland BV over six blocks and the other to Elf Petroleum Ireland BV over five blocks. Both were frontier exploration licences awarded under the south Porcupine round. Under these licences comprehensive licence-specific work programmes will be undertaken which will include the acquisition and processing of 2-D seismic data and the carrying out of special geophysical and geological studies where appropriate.
In addition, I have granted two licensing options this year, one to Marathon International Petroleum Hibernia Limited over six blocks in the Slyne Trough and the other to Enterprise Oil over one full block and four part blocks in the Donegal Basin. I am also currently considering an application for an authorisation over the Seven Heads.
Despite the serious impact on the exploration and production sector of the weak oil price throughout 1998, the industry's commitment to Ireland remains good and exploration licences are at a high level. Enterprise Oil achieved excellent results from last year's Corrib appraisal well, producing gas on test which flowed at a stabilised rate of 63 million cu. ft. per day. The company has already commenced drilling a second appraisal well there. The company also plans to drill an exploration well this year in the Slyne Trough under licence 2/93 and an application to this effect has been received.
Marathon has submitted a plan of development for the south-west lobe of the Kinsale Head gas field and it plans to bring this gas into production by year end. In addition, an application by Providence Resources for a lease undertaking over an area in the north Celtic Sea Basin is under consideration. An application by Marathon to re-enter the well drilled in the south-west lobe of the Kinsale Head gas field in 1995 has been approved.
Mr. McGoldrick, the general manager of Enterprise Oil, stated in an article in The Irish Times on 3 May 1999 that discussions are taking place with Bord Gáis and perhaps other enterprises on the sale of the gas? Have these discussions been successful? Has an agreement been reached with Bord Gáis?
That is a slightly different question, and I may not have the full information with me. It is heartening for possible developments that these discussions are taking place. It is indicative of the fact that the first appraisal well was very successful and the second well is under way. To the best of my knowledge, those discussions have not concluded. Various views on the outcome have been expressed by Deputies here and I will bear those in mind in any discussions in that regard at Cabinet level or with me.
As the Deputy will be aware, Bord Gáis is the responsibility of the Minister for Public Enterprise. Consequently, my Department will liaise with that Department on the outcome to any discussions.
Deputies and Senators have called for special provision to be made for the west in the distribution system. That is something which must be considered but to date there has been no outcome from those discussions.
Is the Minister satisfied with the licensing terms agreed in 1992 by the then Minister for Justice and Communications, former Deputy Ray Burke, and the then Minister for Energy, Deputy Molloy? Does he propose to re-examine that licensing agreement? Is he aware of the concern that those licensing terms were benevolent? Does the Minister agree that there are equal concerns about whether the gas will come ashore in Ireland off the coast of Mayo or in the UK? There is extreme concern about this issue in the west of Ireland at present.
I would like to see the gas first. This is a difficult situation. I hope this field will prove successful but we do not yet know that it will. We have one successful appraisal well but we do not yet know about the second one. I hope we will find out about that during the summer; that would give us a very good indication of what might happen. The Deputy is correct to consider future prospects.
There are no plans at present to alter the terms. Only two companies came forward in the last allocation. I understand that in a reallocation now in view of the increase in oil prices, there could be a better level of application. We want to ensure the maximum level of development and to find as much gas and oil as possible. That is vital to our economy and it is particularly important that we bring the gas and oil onshore. I do not believe there is any prospect of this operation going directly to the UK, particularly in regard to gas. I expect most of the debate to focus on its location when it comes onshore. The company involved will obviously be concerned about price because of the associated high development costs.
