Other Questions. - Offshore Exploration.

Jack Wall

Question:

57 Mr. Wall asked the Minister for Communications, Marine and Natural Resources his assessment of the prospects of oil and gas exploration in Irish waters during 2003; and if he will make a statement on the matter. [10847/03]

As I stated in reply to similar questions on 29 January and 4 March there is justification for optimism in 2003 about petroleum exploration offshore Ireland. Much of the Atlantic Margin of our offshore is either untested or under explored and every effort is being made to promote the exploration of these areas.

These efforts face considerable obstacles. Unfortunately, the past 12 months have seen a very steep decline in exploration activity in North West Europe. In Ireland there are now only seven offshore exploration licences in place – down from a peak of 32 five years ago. In addition western offshore areas are difficult to access and explore, in terms of water depth, distance from land and lack of infrastructure. These define both the difficulties and the challenge that face both the Government and the industry.

Last November I launched the Porcupine Licensing Initiative. Its purpose is to re-open the Porcupine Region, closed since 1999, for exploration. The region will be opened for licensing in four tranches as it covers a large area, 241 full blocks. Some wells have been drilled there in the past but it still has real exploration potential. Regrettably there were no applications in relation to the first tranche which had a closing date of 15 March 2003.

The results from the Dooish well which was drilled off Donegal last year by Enterprise Energy Ireland also gives grounds for optimism. The company will carry out further appraisal of the well this year. My Department has long held that there was "real" exploration potential within these frontier areas and these results further vindicate this view. It is also likely that a further exploration well will be drilled in the Slyne-Erris Basin in 2003 under a licence commitment

Within the past 16 months, two petroleum leases, for the Corrib Gas Field and the Seven Heads Gas Accumulation, have been signed. Production from Seven Heads is set to commence later this year and production from Corrib will depend on the outcome of the planning appeal which is at present being determined by An Bord Pleanála. In addition, there will be a small satellite development, South West Kinsale Greensand, in the Kinsale gas field. This is directed at accessing gas reserves that were not being drained effectively by the existing Kinsale gas field wells. The target date for gas production is July 2003.

In summary, there will be six development wells drilled in 2003, one exploration well, one appraisal well and one production well.

I thank the Minister of State for a comprehensive report on the various initiatives. Besides external factors and the world prices for oil and gas, what factors led to the catastrophic decline in the number of exploration licences in the past four or five years? The Minister of State has hinted several times in recent months that the Dooish well may turn out to be an extremely valuable discovery, if it does not turn us into Norwegians or Saudi Arabians. Is the situation as hopeful as he has hinted? What is the timeframe, if the planning procedure is over, for Corrib to come on stream and what flows are expected from it?

Companies worldwide are reluctant to get involved in gas and oil exploration at present. With regard to Dooish, one is always hopeful. Drilling is set to commence on 1 May with the deep water rig, Jack Bates, and we will continue to monitor the situation. Since the full appraisal has not been carried out, we are not in a position to say how fruitful it will be.

With regard to the Corrib field, I hope the decision by An Bord Pleanála will be arrived at by the end of this month. If the decision is positive, work will commence immediately and the target for delivery of the first gas remains mid-2005.

Is the Ramco Seven Heads development on schedule? The work the Celtic Explorer will do on the sea bed survey is welcome. Will the information gathered by the Celtic Explorer be available to the commercial sector in an effort to encourage further exploration in key areas under the water in Irish territory?

On the Seven Heads, the laying of new pipeline linking the fields from offshore facilities has commenced and work is expected to be completed on target by October 2003. The €25 million sea bed survey, when concluded, will be available to anybody who wants to avail of it.

Has the Government proposals to review the royalty or capital tax breaks system available to the exploration sector at present, given the controversy in different sectors about its generous nature and the way in which it was devised?

There has been no success there so no money has been taken in royalties. At present we have no plans to review the system.