Vol. 516 No. 4
42 Mr. Durkan asked the Minister for the Marine and Natural Resources the ongoing assessment or evaluation, if any, of oil or gas resources in view of the increased oil prices on the world market; the plans, if any, he has to develop resources for commercial purposes in the near future; and if he will make a statement on the matter. [8179/00]
Exploration in oil and gas resources offshore involves huge financial expenditures and commitments, and exploration programmes decided by companies will reflect their confidence in recovering those costs through discoveries. In the past few years, programmes which were entered into when the price of oil was higher had to be paid for despite a virtual collapse in price. This has led to both large-scale re-structuring within the industry, through acquisitions, take-overs and mergers, and significant cost-cutting measures. These measures have had a major negative impact on exploration activities. In north-west Europe in 1999 exploration and appraisal activity fell to its lowest level since the early 1970s. The recent price increases are merely a recovery of the prices of some years ago, and may lead to increased exploration activity generally. It must be accepted, however, that a more positive approach to expenditure on exploration is likely to be dependent on the prospective duration and level of higher oil prices.
As I said in my reply of 10 February last to another question from the Deputy, there have been a number of commercial developments either planned or carried out by the industry in Ireland.
A plan of development for the south-west lobe of the Kinsale Head gas field was approved last year and the field was brought into production in October. There are important developments taking place in relation to two other hydrocarbon accumulations in our offshore, the Corrib gas accumulation and the Helvick oil field.
The position in relation to the Corrib field is that Enterprise Oil and its partners, Statoil Exploration (Ireland) Limited and Marathon International Petroleum Hibenia Limited, have drilled three wells in the Corrib gas accumulation located in the Slyne Trough – an exploration well in 1996 and two appraisal wells, one in 1998 and the second in 1999.
Evaluation of all the data has continued over the past few months with a view to establishing a location for a further appraisal well which Enterprise Oil will drill this spring. It hopes to be in a position to decide whether the Corrib gas field is commercial or not in December of this year.
The final decision as to whether the field is commercial will depend on factors such as the volumes of gas in place, the quality of the reservoir, the quality of the gas, the flow rate of wells, market availability and price and the cost of development of the field.
Should the results of its appraisal programme show that the gas can be commercially produced, it will be necessary for Enterprise Oil to apply to me for a petroleum lease and submit a plan of development for the field for my approval.
The Helvick oil field is held under a petroleum lease by Providence Resources which has declared the field commercial. A detailed plan of development for the field is due to be submitted to me for approval by the end of April this year.
The present level of offshore petroleum exploration activity comprises 22 exploration licences covering 118 blocks or part blocks. In addition there are six offshore licensing options and two leases in place. Applications for one other licensing option and one lease undertaking are at present under consideration. Two onshore licensing options are also held over the north-west carboniferous basin.
