Tuesday, 26 February 2013

Questions (98, 112)

John Halligan

Question:

98. Deputy John Halligan asked the Minister for Communications, Energy and Natural Resources in view of the recent oil/gas find in Ballyroe, County Kerry and the possible find off the coast of Northern Ireland and the evidence this provides that significant gas and oil deposits exist in Irish waters, if he is considering changes in the licensing and tax regime surrounding gas and oil exploration; and if he will make a statement on the matter. [9989/13]

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Richard Boyd Barrett

Question:

112. Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources in view of the recent oil/gas find in Ballyroe, County Kerry and the possible find off the coast of Northern Ireland and the evidence this provides that significant gas and oil deposits exist in Irish waters, if he is considering changes in the licensing and tax regime surrounding gas and oil exploration; and if he will make a statement on the matter. [9988/13]

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Written answers (Question to Communications)

I propose to take Questions Nos. 98 and 112 together.

I assume the Deputies are referring to the Barryroe oil discovery off the coast of Cork and to recent media reports relating to the potential of the Rathlin Basin offshore Northern Ireland.

The results from the appraisal well drilled last year on the Barryroe discovery were encouraging and are the first significant flows of oil on test offshore Ireland in thirteen years. However, more work, including additional appraisal drilling, will be necessary to determine if the discovery, which was originally made by Esso in 1973, can be declared commercial and progress to a petroleum production project.

In relation to recent media reports on the potential of the Rathlin Basin, I understand that these reports relate to an initial resource assessment of a prospect that has yet to be drilled. As this area is outside the jurisdiction of this State I have no function in the matter.

While there has been a modest but welcome upturn in the level of interest in exploration off our coast in recent years, the reality is that the only commercial discoveries of hydrocarbons made in the Irish offshore to date are the three producing gas fields in the Kinsale area, along with the Corrib gas field, which was discovered in 1996. There have been no commercial discoveries of oil.

Despite the low level of commercial discoveries to date, working petroleum systems are known to exist in many of Ireland’s offshore basins, as demonstrated by a number of non-commercial discoveries as well as other oil and gas indicators such as hydrocarbon shows in wells. Nevertheless, the oil and gas potential of the Irish offshore is largely unproven and is likely to remain so until there is a significant and sustained increase in the number of exploration wells being drilled from the current levels of 1 to 2 wells per year.

To this end my Department encourages exploration investment through an active and targeted promotion campaign, regular licensing rounds and by supporting petroleum research projects that deepen knowledge of the petroleum potential of the Irish offshore. Maintaining an appropriate fiscal regime is also critical to attracting this much needed exploration investment to Ireland.

Ireland’s tax terms for oil and gas production are deliberately aimed at attracting new investment and are set at a level comparable to countries such as France, Portugal and Spain, who, like Ireland, have limited petroleum production and with whom we compete for exploration investment.

The Deputies will be aware that I welcomed the publication by the former Joint Committee on Communications, Natural Resources and Agriculture of its report on Offshore Oil and Gas Exploration. The report will contribute to the debate on how best to maximise the benefits to Ireland from the exploration and production of our indigenous oil and gas resources. I have already had the opportunity to discuss the report in the Seanad and I look forward to discussing the report in the Dáil in the not too distant future,