As I outlined in my reply to a question raised in the House on 10 February, the present licensing terms and financial and taxation provisions were introduced in 1992 and have been supported by every Government since then. I believe that without these terms there would be little or no exploration off the Irish coast.
I am aware there is a body of opinion which believes that our licensing terms are too generous and that there are vast quantities of oil and gas in our offshore about to be exploited by foreign exploration companies with few benefits accruing to Ireland. The reality is that companies are not queueing up at present seeking exploration licences in our offshore. Since 1992 a total of 36 exploration licences have been granted, of which 26 were frontier licences. Fourteen of those licences have been relinquished, including seven of the frontier licences.
It is a stark fact that the prospectivity of our offshore area has been demonstrated, over the period 1971 to date, to be consistently low. It is almost 30 years since Ireland's last commercial find. Although 133 exploration and appraisal wells have been drilled in the Irish offshore since 1971 to date – all undertaken and financed by the exploration companies – there has been limited success with only the Kinsale/Ballycotton and the Helvick fields being declared commercial. This level of success in making commercial finds does not compare with the UK or the North Sea. In addition, our waters are deep and operating conditions are among the most difficult in Europe.
Given these facts, the 1992 terms were designed to maintain the competitiveness of the Irish offshore in comparison to other exploration areas. Without exploration there can be no prospect of production, which carries with it the best prospects of benefit to the Irish economy. I will review the 1992 terms when and if I consider it necessary, having regard to the overall need not to jeopardise the interest or involvement of oil companies in our offshore areas. I have asked my Department to provide me with a preliminary assessment of developments since 1992, including any change in prospectivity, which might warrant a review. In the light of this assessment, which I expect by mid-year, I will make a decision on whether a formal review would be in the best interests of all stakeholders.
In relation to the Corrib gas discovery, it is too early to speculate as to the potential benefits. The gas field has not yet been declared commercial; further appraisal drilling will be undertaken this year and the licensees hope to be in a position to decide on commerciality in December this year.
