Written Answers. - Offshore Exploration Licences.

Bernard J. Durkan

Question:

159 Mr. Durkan asked the Minister for the Marine and Natural Resources the extent to which efforts are being made to exploit natural resources with a view to enhancing the national energy grid; and if he will make a statement on the matter. [7740/01]

Bernard J. Durkan

Question:

162 Mr. Durkan asked the Minister for the Marine and Natural Resources the extent to which there are satisfactory indications in respect of oil, gas or other mineral explorations offshore or on land; and if he will make a statement on the matter. [7743/01]

I propose to take Questions Nos. 159 and 162 together.

There are 21 offshore exploration licences, seven licensing options and ten petroleum prospecting licences in place. This shows a decline from a peak of 32 exploration licences in 1997. Furthermore, a number of exploration companies granted licences under a licensing round in 1997 have indicated their intention to relinquish these licences this year.

The year 2001 will, however, see a substantial increase in offshore drilling activity with at least three exploration wells, one appraisal well and two development wells being drilled, but, well commitments beyond 2001 only amount to between three and six for the entire offshore. With this in mind I commenced an initiative aimed at both conserving certain areas of the 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 which 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.
While the Government would obviously like to see the national energy grid being enhanced through the development and exploitation of our natural resources, this will depend on further significant offshore hydrocarbon discoveries. In the meantime, as the Minister and Minister of State at the Department of Public Enterprise announced recently, Bord Gáis Éireann is to proceed with its proposal for a second natural gas interconnector from Scotland to Dublin.
As I mentioned in my reply of 8 February 2001 to a similar question raised by the Deputy in relation to satisfactory indications from offshore exploration, there are developments in relation to two hydrocarbon discoveries, the Corrib gas accumulation and the Helvick oilfield.
Enterprise Energy Ireland declared the Corrib gas field commercial in January this year on behalf of its co-venturers, Statoil and Marathon, and sought a lease from me for its development. This is being considered and evaluated by my Department. Enterprise Energy Ireland has plans to bring the gas ashore by October 2003 and expects the field to be in production for about 15 years.
The position regarding the Helvick oilfield is that Providence Resources completed an appraisal well on the oilfield 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 and, therefore, that Helvick is not commercial.
Providence Resources has other interests in the Celtic Sea, which include blocks 50/6, 50/7, 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 in discussion with Providence Resources about restructuring its authorisations in the east Celtic Sea.
There is a continuing high level of interest shown in exploration for non-petroleum minerals but no significant new developments have taken place since my answer of 8 February. 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.
As part of our ongoing efforts to ensure the attractiveness of Ireland as a location for minerals exploration, my Department is carrying out a comparative study of international royalty and tax regimes. We are 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.