Dáil Éireann díospóireacht -
Tuesday, 20 Apr 1999

Vol. 503 No. 3

Written Answers. - Offshore Exploration.

Enda Kenny

Ceist:

166 Mr. Kenny asked the Minister for the Marine and Natural Resources the number of licences issued to exploration companies for oil and gas exploration within the Irish waters of the Atlantic margin; the companies involved; the number of blocks issued to each company; and if he will make a statement on the matter. [10249/99]

Enda Kenny

Ceist:

167 Mr. Kenny asked the Minister for the Marine and Natural Resources the conditions of licences issued to a company (details supplied); the financial arrangements arising from this issue; and if he will make a statement on the matter. [10250/99]

Enda Kenny

Ceist:

168 Mr. Kenny asked the Minister for the Marine and Natural Resources the extent of undersea area; the number of blocks this comprises which remain the property of Ireland and in which no exploration licences have been issued in the area known as the Atlantic margin; and if he will make a statement on the matter. [10251/99]

Enda Kenny

Ceist:

169 Mr. Kenny asked the Minister for the Marine and Natural Resources if he has satisfied himself that adequate arrangements are in place to ensure a decent pay off level to the Irish taxpayer arising from any commercial oil or gas find in the area known as the Atlantic margin off the coast of Achill and for which exploration licenses have been issued to exploration companies; and if he will make a statement on the matter. [10252/99]

Enda Kenny

Ceist:

170 Mr. Kenny asked the Minister for the Marine and Natural Resources the system in place of monitoring reports of gas and oil finds by licensed exploration companies; if an inspector of his Department was present to verify flaming gas on test at a stabilised rate of 63 million cubic feet of gas per day in 1998 when a company (details supplied) drilled and tested an appraisal well; if he has satisfied himself of the veracity of reports on this well; and if he will make a statement on the matter. [10253/99]

Enda Kenny

Ceist:

172 Mr. Kenny asked the Minister for the Marine and Natural Resources if he has received a copy of the report by consultants (details supplied) on the potential for gas exploitation in the Corrib Field off Achill, County Mayo; his views on the report's analysis that the field could contain up to five trillion TCF of gas as against the one trillion cubic feet, given in the reply to Parliamentary Question No. 150 of 16 February 1999; if he will lay a copy of the report before Dáil Éireann; and if he will make a statement on the matter. [10261/99]

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

I propose to take Questions Nos. 166, 167, 168, 169, 170 and 172 together.

The total area of the currently designated continental shelf covers some 652,000 sq. km, comprising approximately 2,600 blocks, of which approximately 2,300 are situated in the Atlantic off our west coast.

There are 22 petroleum exploration licences in place at present off the west coast covering 115 blocks. Details of these licences together with the names of the licensees are as follows:

Licence	Licence Period	Block No.	Participants*Operator
2/93Deepwater	1 January 1993 –31 December 2004	18/25, 18/29, 18/30, 27/4, 27/5 & 27/9	*Enterprise Oil plc;Saga Petroleum Ireland Limited;Statoil Exploration (Ireland) Limited
2/94Frontier	15 March 1994 –14 March 2010	12/2, 12/3, 12/7 & 12/8	*Enterprise Oil plc.Agip Ireland BV.
3/94Frontier	15 March 1994 –14 March 2010	18/14, 18/15, 18/19 & 18/20	*Enterprise Oil plc;Saga Petroleum Ireland Limited;Statoil Exploration (Ireland) Limited
5/94Frontier	15 March 1994 –14 March 2010	11/29, 19/2, 19/3, 19/4, 19/7, 19/8, 19/11, 19/12, 19/16, 19/17 & 19/21	*Statoil Exploration (Ireland) Limited;Union Texas Petroleum, Limited;Murphy Ireland Offshore, Ltd;Enterprise Oil plc.
2/95Frontier	15 March 1995 –15 March 2010	26/28 & 26/29	*Statoil Exploration (Ireland) Limited
5/95Frontier	15 March 1995 –15 March 2010	34/15, 34/20 & 35/16	*Chevron Europe Limited;Statoil Exploration (Ireland) Limited
6/95Frontier	15 March 1995 –15 March 2010	35/19, 35/29, 35/30, 36/21, 36/26, 44/4 & 44/5	*Marathon International PetroleumHibernia Limited;Phillips Petroleum Company UnitedKingdom Limited
8/95Frontier	15 March 1995 –15 March 2010	34/24, 34/25, 34/30, 35/21, 35/23(p) & 35/24	*Statoil Exploration (Ireland ) Limited;Conoco (U.K.) Ltd;Union Texas Petroleum Limited;Dana Petroleum (E&P) Limited
9/95Frontier	15 March 1995 –15 March 2010	35/17, 35/22, 35/23(p) & 35/28	*Total Oil Marine plc.;DSM Energy ( Ireland) B.V.;Conoco (UK) Limited;ARCO Ireland Offshore Inc.
2/97Frontier	4 June 1997 –3 June 2013	18/9, 18/10 & 19/6	*ARCO Ireland Offshore Inc.;BG Exploration & Production Ltd;Anadarko Ireland Company
3/97Frontier	4 June 1997 –3 June 2013	16/27, 25/1(p), 25/2, 25/6, 75/9(p) & 75/10	*BG Exploration & Production Ltd;ARCO Ireland Offshore Inc.;Anadarko Ireland Company
4/97Frontier	4 June 1997 –3 June 2013	25/1(p), 75/4, 75/5, 75/8 & 75/9(p)	*Elf Petroleum Ireland BV;Phillips Petroleum Exploration Ireland
5/97Frontier	4 June 1997 –3 June 2013	5/18, 5/23 & 5/28	*Elf Petroleum Ireland BV;Phillips Petroleum Exploration Ireland;British Borneo International Ltd
6/97Frontier	4 June 1997 –3 June 2013	5/16, 5/17, 5/21, 5/22, 5/26 & 5/27	*Enterprise Oil plc;Mobil Oil North Sea Ltd;Murphy Ireland Offshore, Ltd;Union Texas Petroleum Limited
7/97Frontier	4 June 1997 –3 June 2013	11/20, 11/23, 11/24, 11/25, 11/28, 12/11, 12/12 & 12/16	*Phillips Petroleum Exploration Ireland;Agip Ireland BV
8/97Frontier	4 June 1997 –3 June 2013	75/21, 75/26, 82/25 & 82/30	*Phillips Petroleum Exploration Ireland;Agip Ireland BV
9/97Frontier	4 June 1997 –3 June 2013	83/9, 83/10, 83/14 & 83/15	*Phillips Petroleum Exploration Ireland;Elf Petroleum Ireland BV
Licence	Licence Period	Block No.	Participants*Operator
10/97Frontier	4 June 1997 –3 June 2013	83/13, 83/18, 83/19 & 83/20	*Saga Petroleum Ireland Ltd;Total Oil Marine plc;Statoil Exploration (Ireland) Limited;Shell EP Atlantic BV
11/97Frontier	4 June 1997 –3 June 2013	1/17, 1/18, 1/21, 1/22, 1/23, 1/26, 1/27, 77/4, 77/5, 78/25, 78/29 & 78/30	*Shell EP Atlantic BV;Statoil Exploration (Ireland) Limited;BP Exploration Operating Company Ltd
12/97Frontier	4 June 1997 –3 June 2013	10/30, 11/26, 18/4, 18/5 & 19/1	*Statoil Exploration (Ireland) Limited;Shell EP Atlantic BV
1/99	15 March 1999 –14 March 2014	43/19, 43/20, 43/24, 43/25, 43/28 & 43/29	*Agip Ireland BV
2/99	15 March 1999 –14 March 2014	44/18, 44/23, 44/24, 44/29 & 44/30	*Elf Petroleum Ireland BV

The remainder of the area off the west coast is not licensed at present and the acreage which was offered to the industry in rounds during the last four years is closed for licensing at this time.

The benefits to the taxpayer arising from further discoveries of commercial quantities of oil and gas would be very considerable, though difficult to quantify precisely at this stage. The direct impact would depend on aspects such as the size of the accumulation, duration of production, flow rates, the cost of development, operating expenses and market price. The economic benefits resulting directly from the natural gas produced from the Kinsale Head and Ballycotton gas fields illustrate the obvious importance of indigenous energy supplies. These benefits reflect the employment in the services sector of engineering and technical industries, technical support industries, the import substitution effect and downstream economic activity.

The licence held by Enterprise Oil to which the Deputy refers is subject, as are all exploration licences, to the Licensing Terms for Offshore Oil and Gas Exploration and Development 1992, and the 1992 Finance Act. A development under the 1992 terms and the 1992 Finance Act would not be subject to royalties or state participation and corporation tax would be levied at a special rate of 25 per cent for developments brought into production by certain specified dates. The terms are attractive but are necessary and appropriate given the current position of oil and gas exploration and production offshore Ireland. The terms strike a balance between the interests of the State and those of the oil and gas industry. Rentals in respect of all licences are specified in the terms and these are collected on an annual basis. An information package, which contains details of licensing procedures and terms and provisions relating to petroleum taxation, is being furnished to the Deputy.

My Department receives all data obtained by the operators of licences in respect of exploration, appraisal and development operations. In the case of the Corrib appraisal well, as for all wells, daily reports, together with all specific data acquired, were received in my Department as soon as they became available, on a confidential basis, via the Internet. This data was analysed by specialists in my Department who also used the services of specialist consultants where considered necessary. An authorised officer from my Department was present on the drilling rig during the test. He has assured me that I have a full and accurate set of data from the well.

The report by consultants to which the Deputy refers is the October 1998 edition of the North West Europe Upstream Report which contains an article about the Corrib gas discovery. This was published by Wood Mackenzie and they have provided my Department with a copy of the article. Even though Wood Mackenzie state that they believe the field can already be regarded as commercial, I am satisfied that, on the basis of the data acquired to date, such a conclusion cannot be made at this stage. This view is borne out by the fact that a further appraisal well is to be drilled this year. At this time, it is not known with precision how much gas is in place and one, perhaps two, more years extended char 4,28 assessment is needed before a decision on commerciality can be taken. If so it is then likely to take up to two further years to carry out development and bring the field into production. Nonetheless, as I explained in my reply to the Deputy's parliamentary question on 16 February 1999, Enterprise Oil have indicated that the Corrib gas accumulation could contain one trillion cubic feet of gas in-place.

Reference to five trillion cubic feet of gas in the Corrib Field is not an accurate representation of what Wood Mackenzie concluded in their article. While it is unlikely that Wood Mackenzie has had access to specific data from the Corrib Field, they estimated that the structure could hold about 1.2 trillion cubic feet of reserves but indi cated that at this stage estimates must be tentative. They considered that there was potential in the greater Slyne Erris Trough area for up to five trillion cubic feet of gas because of other structures known to exist in the area but as yet undrilled. At this time such a figure is purely speculative. As the Wood Mackenzie report was not commissioned by my Department, but is a commercial publication for private circulation to subscribers only, the matter of laying it before Dáil Éireann does not arise.