Liam Hyland
Ceist:8 Mr. Hyland asked the Minister for Transport, Energy and Communications the plans, if any, he has to ensure that oil prospecting licences are actually used. [6542/95]
Ceisteanna—Questions. Oral Answers. - Oil Prospecting Licences.
In addressing this question, I take it that the Deputy means any type of authorisation or licence which applies to petroleum exploration activities in the Irish off-shore.
There are six petroleum authorisations under which companies can hold interests offshore Ireland. They are a petroleum prospecting licence, a licensing option, an exploration licence, a reserved area licence, a lease undertaking, and a petroleum lease.
General requirements applicable to all authorisations are contained in the publication, Licensing Terms for Off-shore Oil and Gas Exploration and Development. All authorisations issued to companies are under these terms and conditions. The nature, extent and appropriateness of the work programme required is determined and agreed having regard to the type of authorisation being granted.
Full reports of all activities undertaken are submitted to my Department on a regular basis. From these and from the level of monitoring being undertaken by my Department, I am satisfied that obligations are being fully met by the authorisation holders and that commitments are carried out within the agreed timeframes.
Does the Minister agree that the largest number of companies ever has joined the Irish off-shore operators' group in the past year? Will he indicate the number involved and the number of licences held by them?
Eleven prospecting licences are held at present. A petroleum prospecting licence is a nonexclusive licence which gives the holder the right to explore for petroleum in any area not covered by exclusive authorisations such as an exploration licence and petroleum lease. A total of 22 exploration licences are currently held. Such a licence gives the holder the exclusive right to explore for petroleum in a specified area for a number of years. The holder is obliged to carry out a work programme which must include the drilling of at least one exploration well. Nine licensing options are held at present. A licensing option gives the holder the right, subject to certain conditions, to obtain a petroleum exploration licence over a specified area during or at the end of the period of the option. During the option period the holder is obliged to carry out a geological-geophysical exploration work programme in the specified area.
The conversion of an option into an exploration licence is subject to agreement on an appropriate exploration work programme for all or part of the licensed area, including drilling one or more exploration wells. Two companies currently hold lease undertakings. Such an undertaking is granted when a discovery is made in a licensed area and the licensee is not yet in a position to declare the discovery commercial, but expects to be able to do so. This is an undertaking by the Minister, subject to certain conditions, to grant a petroleum lease at a stated future date. Twelve petroleum leases are held at present. If a petroleum lease is granted and a commercial discovery is established in a licensed area, the licensee applies for the petroleum lease with a view to development of the field. This gives the holder the exclusive rights to produce and dispose of petroleum in the area for a specified period which would normally be expected to cover the field's life. The development is subject to the Minister's approval. A plan of development is submitted to the Minister setting out the details of the development proposals.
Can the Minister of State confirm that in the event of a successful commercial find and the subsequent exploitation of that, the oil will be brought ashore in Bantry and west Cork in view of the fine facilities there?
I was pleased to announce recently that the Government intends to invest £18 million, through the Irish National Petroleum Corporation, to bring the facilities in Bantry back into commission, that facility will certainly be available on a commercial basis to any oil company achieving success in the Porcupine Bank which, without affecting the market in any way, is the most likely place to find oil in the near future. Companies making such a find would require the type of facilities that will then be available at Whiddy which I expect to be ready for use in about 12 months.
Is the Minister aware that the INPC has been asked to put up a £50 million bond with its planning application, and does he regard that as a sensible arrangement?
That is not true. That was a report in a newspaper which was corrected by me and, in fairness to the newspaper concerned, it carried the correction the next day. The £50 million bond was part of an original planning decision by the local authority. It was appealed by the INPC and removed on appeal.
Is the £18 million wholly Exchequer funding, private funding or a joint venture?
The £18 million will be raised from within the resources of the Irish National Petroleum Corporation itself. It has various ways of doing that. It can do so by way of the commercial activity that will arise, by putting a levy on petroleum companies — because it will be reducing an existing levy one would balance out the other — and, because of the development in Bantry there will no longer be a 90 days' storage requirement on the oil companies in their own storage facilities, which was a charge on them.
In the event of no oil being found, what use will be made of Bantry that justifies the decision to proceed with an investment of £18 million?
The facility is badly needed, and it is highly desirable, from a strategic point of view, to store our own reserves. It has the capacity to store 1 million tonnes of oil. That facility will be available for commercial storage of oil where the INPC would very quickly recover the £18 million to be expended. I am very conscious that the facility there, effectively in moth balls because it cannot be used, has a value of £100 million. It would be commercial madness and socially irresponsible to leave a £100 million investment lying idle for the sake of £18 million.