Dáil Éireann díospóireacht -
Tuesday, 3 Nov 1998

Vol. 495 No. 7

Written Answers. - Offshore Exploration.

Michael Ring

Ceist:

153 Mr. Ring asked the Minister for the Marine and Natural Resources if he will outline details of the gas find off north Mayo, including the size of the find; the income, if any, it will generate for the local and national economy; and if a deal was done with the exploration company regarding this find. [21080/98]

Michael Ring

Ceist:

154 Mr. Ring asked the Minister for the Marine and Natural Resources if a company (details supplied) has applied for a full drilling licence to extract the gas found off the north Mayo coast; and, if so, the conditions, if any, attached to the licence. [21081/98]

Minister for the Marine and Natural Resources (Dr. Woods)

I propose to take Questions Nos. 153 and 154 together.

Enterprise Oil plc. as operators, together with their partners Saga and Statoil were granted a frontier petroleum exploration licence in 1994, licence 3/94, which give them the exclusive right to explore for oil and gas in a four block area off the coast of Mayo. They have drilled two wells under the licence — an exploration well in 1996 and an appraisal well this year. The 1996 well resulted in a gas discovery, but Enterprise were unable to test the well due to mechanical problems. However, the 1998 appraisal well, drilled very close to the location of the 1996 well, was successfully tested and production of gas was measured at a stabilised rate of 63 million standard cubic feet per day.

It is too early at this stage to give any indication of the size of the gas accumulation and the licensees will not be in a position to do so until they have fully evaluated the discovery, this will involve further appraisal work being carried out over the next two to three years including the drilling of additional appraisal wells. Should the results of this appraisal programme show that the gas can be commercially produced it will be necessary for Enterprise to apply to my Department for a petroleum lease — the authorisation required to bring the gas into production. The licensees have not made an application for a petroleum lease and no agreement has been entered into in regard to development of the field. Such a petroleum lease would be granted in accordance with the 1992 licensing terms for offshore oil and gas exploration and development.

At this stage it would be impossible to predict the effects of developing the discovery on the local and national economy. Any benefits arising from a development would be dependent on aspects such as the size of the accumulation, duration of production, flow rates, the type of development system, the cost of development, operating expenses and market price. It is essential that we derive benefits from the production of our indigenous oil or gas resources and I will ensure that at all stages of exploration, appraisal and development, wherever feasible, opportunities for participation by Irish providers of goods and services are made available at local and national level. I must emphasise that this is an international business and where we have the capability in Ireland we must be competitive in regard to price, quality and timeliness.