Dáil Éireann Debate, Tuesday - 5 April 2011
220 Deputy Martin Ferris asked the Minister for Communications, Energy and Natural Resources if he will ensure that the royalty regime imposed on oil and gas companies is extended to the Corrib gas project and that a wider review of the revenue and licensing terms for the Corrib field and for the sector in general is proceeded with immediately in line with his party’s manifesto commitment; and if he will make a statement on the matter. [6368/11]
Amharc ar fhreagraThere is no royalty regime in Ireland applying to petroleum production. In 1987, Ireland followed the lead of other countries such as the UK and Norway in moving away from a royalty based payments system to a tax based system. Under a tax based system the return to the State is linked directly to the profitability of the individual oil or gas field, as compared to a royalty system where payments would be linked to the actual volume of production, without taking account of differences in development cost or actual profitability.
The Corrib Gas field was discovered in 1996 under Frontier Exploration Licence 3/94 which was granted in March 1994. Profits from petroleum production arising from exploration licences granted prior to 2007 are taxed at a rate of 25% and this is the rate that applies in the case of profits from the Corrib Gas Field. As regard an early review of the fiscal licensing terms governing petroleum production, I refer the Deputy to Priority Questions Nos. 24 and 25 today.
221 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the number of licence holders who have declared shows of hydrocarbons in their reports to the petroleum affairs division of his Department; and the areas in which these hydrocarbons have been found. [6427/11]
Amharc ar fhreagra222 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources in which areas the petroleum affairs division of his Department expects exploratory drilling to occur over the next year. [6428/11]
Amharc ar fhreagra223 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources in view of the fact that a number of companies are in the later phases of their exploration licences, the number of licence holders the petroleum affairs division of his Department expects to apply for petroleum leases and the number of licence holders it expects to apply for lease undertakings. [6429/11]
Amharc ar fhreagra224 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the position regarding the status of licences 2/05, 2/06 and 3/07. [6430/11]
Amharc ar fhreagra225 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the number of lease undertakings that have been granted; the companies to which these lease undertakings have been granted and for which blocks. [6431/11]
Amharc ar fhreagra226 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the number of applications for lease undertakings the petroleum affairs division is currently reviewing. [6432/11]
Amharc ar fhreagra227 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the number of companies that have made declarations of commerciality to the petroleum affairs division and which licence holders have made these declarations. [6433/11]
Amharc ar fhreagra228 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the potential value of these hydrocarbons. [6434/11]
Amharc ar fhreagra229 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the number of applications for petroleum leases the petroleum affairs division of his Department is currently reviewing. [6435/11]
Amharc ar fhreagra230 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the number of potential petroleum leases under review that are covered by the terms of the 1992 licensing arrangements. [6436/11]
Amharc ar fhreagra231 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the number of potential petroleum leases that are covered by the terms of the 2007 licensing arrangements. [6437/11]
Amharc ar fhreagra232 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the onshore areas that are covered by the 2010 granted onshore licensing options. [6438/11]
Amharc ar fhreagra233 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources if companies have applied for onshore petroleum prospecting licences and if these licences have been granted. [6439/11]
Amharc ar fhreagra234 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the number of applications the petroleum affairs division of his Department has received for the 2011 Atlantic margin licensing round. [6440/11]
Amharc ar fhreagra235 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources based on data supplied from licence holding companies and from State sponsored studies, the number of barrels of oil equivalent, BBOE, the petroleum affairs division estimates to be offshore Ireland. [6441/11]
Amharc ar fhreagra236 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources the estimate of barrels of oil equivalent offshore, the amount that is gas and the amount that is oil and the amount of these resources that are thought to be recoverable. [6442/11]
Amharc ar fhreagra237 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources based on data supplied from licence holding companies and from State sponsored studies, the number of barrels of oil equivalent, BBOE, the petroleum affairs division of his Department estimate to be onshore Ireland. [6443/11]
Amharc ar fhreagra238 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources of the estimate of barrels of oil equivalent onshore, the amount that is gas and the amount that is oil and the amount of these resources thought to be recoverable. [6444/11]
Amharc ar fhreagraI propose to take Questions Nos. 221 to 238, inclusive, together.
Exploration for oil and gas in Ireland, in common with most other jurisdictions, is carried out under licence from the State. Petroleum exploration authorisations are issued under the Petroleum and Other Minerals Development Act 1960 and the operational framework is set out in the Licensing Terms for Offshore Oil and Gas Exploration, Development & Production 2007.
Recent assessments of yet-to-find potential based on a Petroleum Systems Analysis of the Rockall and Porcupine Basins indicate a total reserve potential in the order of 10 billion barrels of oil equivalent (oil and/or gas) for the offshore frontier basins west of Ireland. This divides roughly into 6.5 billion barrels of oil and 20 trillion cubic feet of gas. I must emphasise that these figures only represent ‘potential' reserves, or the reserves that might be present based on geological criteria and regional comparisons, and that they have not been discovered. Actual reserve figures are likely to vary widely from these estimates and will not be known without a dramatic increase in the level of exploration activity. The Petroleum Systems Analysis of the Rockall and Porcupine Basins Offshore Ireland (Digital Atlas and accompanying GIS version) is a commercial report available to the industry at a cost of €25,000.
The primary purpose of the assessments was to highlight the existence of significant hydrocarbon potential in the Irish offshore area in order to encourage increased activity by the exploration sector in areas receiving very little attention because of low perceived success rates, high exploration costs and long lead in times required to develop any discovery. There are no comparable assessments available for the reserve potential of remaining offshore and onshore basins as the geological complexity of those areas, where smaller sized discoveries can be expected, makes it much more difficult to generate meaningful estimates. Petroleum exploration investment is encouraged through the active promotion of Ireland's petroleum potential and the holding of regular licensing rounds. The 2011 Atlantic Margin Licensing Round, which includes all of Ireland's major Atlantic sedimentary basins with proven petroleum systems, is due to close on 31 May 2011. Based on experience to date, I expect that the majority of applications for the Round will be received on or immediately before the closing date for the competition.
There are seven standard exploration and fourteen frontier exploration licences active in the Irish offshore. Exploration activities under these licences are divided into a number of phases with each phase subject to the performance of an agreed work programme including detailed reporting and the release of exploration data and evaluation reports to my Department. When each phase of the licence is complete, the licensees must determine whether they want to proceed to the next phase or whether they wish to relinquish the acreage.
Where a prospect is identified and positively evaluated, an exploration well needs to be drilled before the presence of hydrocarbon resources could be determined. If an exploration well shows that hydrocarbons are present, additional work, which may include one or more appraisal wells, is required to estimate the quantities of recoverable hydrocarbons and to determine if the discovery is commercial. If a commercial discovery is made, the licensee must apply for a petroleum lease in order to proceed to the development and production stage. Where a discovery is made and the licensee is not in a position to declare the discovery commercial by the end of the licence period, but expects to be able to do so in the foreseeable future, the licensee may apply for a lease undertaking.
My Department is currently considering applications for two lease undertakings relating to exploration licences in the Celtic Sea, however at this stage it is not known whether these or any of the other nineteen active exploration licences will result in commercially extractable finds of hydrocarbons. There are no applications for petroleum leases before my Department at present. The Corrib Gas Field is the only discovery covered by a petroleum lease and not yet in production.
The potential value of any commercial petroleum discovery will depend on a combination of factors including, the volume of recoverable resources, the cost of developing and operating the infrastructure, the price of petroleum over the life of the field, together with the timing and profile of production.
Turning to the onshore area, there are currently no petroleum prospecting licences in place. Following a detailed evaluation of applications received last year for licensing options in the Northwest Carboniferous Basin and the Clare Basin, my Department has offered onshore petroleum licensing options to: Tamboran Resources PTY Ltd covering 986 sq km over parts of Cavan, Leitrim and Sligo; Lough Allen Natural Gas Company Ltd covering 467 sq km over parts Cavan, Leitrim, Roscommon and Sligo; and Enegi Oil Plc covering 495 sq km over part of Clare. Two of the companies have already accepted the licensing options on offer and applications for petroleum prospecting licences are expected from both companies shortly. Maps detailing the area covered by the onshore licensing options are available on my Department's website.
In relation to exploration drilling that might take place in the Irish offshore over the next twelve months, while my Department is aware that plans are being advanced for exploration or appraisal drilling, no application for approval has been received by my Department to date. I would expect that over the next few months greater certainty will emerge in relation to potential drilling.
In relation to the Deputy's query regarding the status of certain exploration licences, I can confirm that Frontier Exploration Licences 2/05 and 2/06 were relinquished with effect from 30 October 2010 and 31 August 2010 respectively. Standard Exploration 3/07 was relinquished with effect from 31 March 2010.
I am separately forwarding by post to the Deputy a table that details the eighteen significant hydrocarbon discoveries made on and offshore Ireland to date. The inclusion of that table in the body of this reply was not possible for technical reasons. The table includes details of petroleum authorisations currently in place along with details of the original discovery authorisation. Full details of petroleum authorisations are updated and published on my Department's website on a regular basis. I hope that the comprehensive information provided is of assistance to the Deputy.
