Written Answers. - Offshore Exploration.
Bernard J. Durkan
Question:
27
Mr. Durkan
asked the
Minister for the Marine and Natural Resources
if his attention has been drawn to untapped reserves of oil, gas and or other mineral resources; if exploration is likely in this regard; and if he will make a statement on the matter.
[3367/01]
Bernard J. Durkan
Question:
55
Mr. Durkan
asked the
Minister for the Marine and Natural Resources
the extent to which exploration continues for oil, gas or other minerals; and if he will make a statement on the matter.
[3477/01]
I propose to take Questions Nos. 27 and 55 together.
As the Deputy will be aware there are developments in relation to two hydrocarbon discoveries in our offshore, the Corrib gas field and the Helvick oil field. The position regarding the Corrib gas field is that last month Enterprise Energy Ireland, acting as operator for the development of the Corrib gas field, declared it commercial on behalf of its co-venturers, Statoil Exploration (Ireland) Limited and Marathon International Petroleum (Hibernia) Limited and sought a lease from me for its development. This is at present being considered and evaluated by my Department. Enterprise Energy Ireland have plans to bring the gas ashore by October 2003 and expect the field to be in production for about 15 years.
All data and information relating to the field are submitted on an ongoing basis by the company to my Department, where it is analysed using in-house expertise in conjunction with consultants. The Deputy will appreciate that all material associated with this assessment is commercially sensitive and therefore must remain confidential. However, I should point out that Enterprise Energy Ireland are reported as saying that the Corrib field might have in place recoverable reserves of more than one trillion cubic feet of gas.
As regards the Helvick oil field, the position is that Providence Resources completed an appraisal well on the oil field in the Celtic Sea in September last year. The drilling and tests results have been reviewed in detail over the last few months. Although the tests results on the well confirmed the good reservoir and oil characteristics seen on the original Helvick oil discovery well in 1983, further detailed analysis has indicated that the Helvick reservoir is much smaller than had been hoped and is highly compartmentalised. Accordingly Providence Resources has concluded that a "stand alone" development of Helvick cannot be justified. Following analysis of the data obtained in 2000 my technical advisors have indicated that Helvick is not commercial.
Providence Resources has other interests in the Celtic Sea, which include blocks 50/6 and 7, 50/11 and the Ardmore gas prospect. The company has indicated that it remains committed to realising value from its Celtic Sea assets but the fact that Helvick cannot be made commercial has resulted in Providence Resources reviewing its plans for the Celtic Sea as a whole and conducting a strategic appraisal of a number of business development options. My Department is currently in discussion with Providence Resources about restructuring their authorisations in the east Celtic Sea.
Offshore petroleum exploration activity continues with 21 exploration licences in place covering 106 blocks or part blocks. In addition, eight offshore licensing options and two leases are in place. Applications for a further licensing option and three lease undertakings are at present under consideration in my Department.
I expect to see a substantial increase in offshore drilling activity this year with at least three exploration wells, one appraisal well and two development wells being drilled. However, well commitments beyond 2001 only amount to between three and six for the entire Irish offshore and there is a possibility that many of the frontier exploration licences issued in previous licensing rounds will be relinquished this year.
With this in mind I have commenced an initiative aimed at both conserving areas of the Irish offshore by closing them off from development for the moment and gauging interest on the part of the industry in making well commitments in certain other limited areas. To that end, I have started a consultation process involving companies who are licence holders here in order to gauge their view on whether well commitments might be forthcoming in the event that a limited number of new licences might be offered.
Regarding the Deputy's reference to the as yet untapped reserves of oil and gas, the fact remains that Irish prospectivity is low with only three successful exploration wells out of 122 wells in 30 years. Whether we like it or not, Irish offshore prospectivity is not comparable with our oil producing neighbours – in the same period some 7,000 wells were drilled in the North Sea.
The Corrib find, although very welcome, cannot be regarded as changing that view. Only one exploration well was drilled in the Irish offshore in the last three years of the 1990s, despite the existence of the 1992 terms. While we expect three exploration wells to be drilled in 2001, commitments beyond that amount to between three and six for the entire Irish offshore. It is possible that many of the frontier exploration licences issued in the few rounds will be relinquished this year. Not only are we competing with the relatively low risk, highly prospective North Sea but also with current development "hot spots" in North and West Africa, the Gulf of Mexico, Brazil and the Caspian region.
There is a continuing high level of interest shown in exploration for non-petroleum minerals. Indeed it is gratifying that we have not only maintained, but increased in real terms, our share of world exploration funding in the context of a major global cutback over the past three years. The most recent report that I laid before the Houses under the Minerals Development Acts showed that at the end of December 2000 there were 480 prospecting licences being operated. The number of licences has increased over the last three years. We are actively engaged in promoting investment interest in minerals exploration from overseas companies, in order to keep the level of exploration in the country as high as possible.
The State itself does not carry out prospecting. In setting and agreeing the exploration programme under any licence, I ensure the licence is awarded to the candidate proposing the most advantageous programme. By monitoring the reports of licence holders and site visits, I ensure that the terms of the commitment are met in each case, that we are immediately aware of finding any significant mineralisation and that there is a suitably aggressive pursuit of any positive results. Whenever a commercial find is made it is evidenced to me by an application for a State mining facility. This is made in parallel with applications to the relevant local authority for planning permission under the Local Government (Planning and Development) Acts and to the EPA for an integrated pollution control licence.
As part of our ongoing efforts to ensure the attractiveness of Ireland, my Department is at present carrying out a comparative study of international royalty and tax regimes. We are at present examining the preliminary results of that study. That examination and the further study results will inform policy decisions in the future and allow us to maintain our competitive status.
