asked the Minister for Energy the number of bore-holes drilled off the Irish coast over the past ten years in the search for oil and gas; the location of each bore-hole which has shown traces of hydrocarbons; and the yield in each case.
Ceisteanna—Questions. Oral Answers. - Oil and Gas Exploration.
8.
59 hydrocarbon exploration wells have been completed off the Irish coast over the past ten years.
There have been traces of hydrocarbons recorded in most of these wells. However, there is a big difference between a "trace" and a "show" of oil, and between a "show" and a "flow". These are terms used in the industry in relation to exploration results which cannot be properly interpreted in isolation from other information and data. For instance a flow rate is not indicative of the size of the structure in which it occurs. Nor is a relatively high flow rate from one well confirmation that the deposit will prove commercial. The following information must, therefore, be viewed in that context.
A well drilled in Block 48/25 in the Celtic Sea in 1971 led to the discovery of gas deposits off Kinsale Head. Two further wells were drilled in 1972 and 1973 to appraise and further delineate the structure. These wells were drilled in Blocks 48/20 and 49/16. This led to the declaration of a commercial gas accumulation off Kinsale Head. The field came on stream in 1978 and the operator contracted to supply 124 million cubic feet of gas per day over a 20-year period.
The following wells completed in the Celtic Sea had hydrocarbon flows on test.
A well drilled in the Ardmore structure in Block 49/13 in 1974 flow tested gas at a daily rate of 119 thousand cubic feet. A further well in the same structure in Block 49/14 in 1975 flow tested gas at a rate of 8.81 million cubic feet per day.
In the Seven Heads structure two wells were completed in 1974. One in Block 48/24 flowed 780 barrels of oil per day on test and up to 10 million cubic feet of gas per day. The second well, drilled in Block 48/28, flow tested oil at a rate of 1,550 barrels per day.
These two structures were considered too small and too complex to justify economic development.
Of the 14 wells drilled to date in the Porcupine Basin three flow-tested hydrocarbons as follows:— 730 barrels per day from a well drilled on block 35/8 in 1978; 5,500 barrels per day from a well drilled in block 26/28 in 1979; 1,500 barrels per day from a well drilled in 1980— also in block 26/28.
In relation to the natural gas field at Kinsale I think the Minister said that 124 million cubic feet per day was what the prospecting company agreed to deliver. Since then it appears that the field has proved to be larger than expected by about 20 to 30 per cent. Would the Minister say whether it is intended to take this over-supply in the field as an extra amount per day which would bring it up another 40 million cubic feet per day, or extend the life of the field to say 26 or 27 years?
The increase in the estimated reserve is in excess of one-third. I understand there are certain legal consequences under the agreement signed in relation to it of this increased estimate. One of the consequences is an increase in the amount of gas contracted to be supplied and to be taken. So, there is an automatic increase arising under the terms of the contract which I think answers the Deputy's question.
Does this imply that we must take extra gas under the contract or can we extend the life of the field?
My understanding is that we must take a certain amount of extra gas per day depending on the amount of the increase. We have certain options: we do not actually have to take the gas but we have to pay for it and accumulate it. We could, perhaps, do that; that is an option open to us, but basically I understand that the increase in the amount of the reserve involves an increase in the amount that we are obliged to take.
This is a fundamental policy decision on the part of the Government in relation to our natural resources. The Government or the Minister must have some view as to whether it is better for the economy to take more now, as opposed to paying for more now, or to extend the life of the field. What is the Government's view on this?
Perhaps the Deputy did not quite take in what I said.
I did.
It is not a question of what view I or the Government take; it is a question of the contractual obligation which arises under the agreement with the operator of the well.
I understand that the contractual obligation could involve not taking the gas now but paying for it now which would mean that you would have the gas available and paid for in 20 years' time or, making a deliberate decision to pay for the gas and take it out now and absorb it?
The Deputy will appreciate that is a different question. The question of paying for it now and storing it is a different question from whether we should extend——
It is a policy option open to the Government. The sooner the country in general find out what the Government intend to do with this small but significant increase, the better. I think it is essential that the Minister should tell the House.
I suggest that it is a different option from the one the Deputy spoke about.
It is one of the options open to the Government.