I propose to take Questions Nos. 1139 to 1142, inclusive, together.
Under the Licensing Terms for Offshore Oil and Gas Exploration and Development the Minister may enter into an undertaking with the holder of an exploration licence, or licensing option, to grant a petroleum lease in relation to a part of an authorisation where the licensee makes a discovery and is of the opinion, but cannot confirm at that time, that the discovery is commercial. Where the Minister concurs with this assessment, the Minister may award a lease undertaking, which will be subject to an agreed work programme that is aimed at establishing whether or not the discovery is in fact commercial. My Department is currently considering five applications for lease undertakings. The operator of standard exploration licence 1/11, which contains the Barryroe Field, has not applied for a lease undertaking.
Other than in a case where a declaration of commerciality has been made by the authorisation holder and accepted by me as Minister, it would not be appropriate for me to make specific comment on the petroleum potential of any area that is the subject of an exploration/appraisal authorisation, or an application for such an authorisation.
Where a commercial discovery has been established the authorisation holder is required to apply for a petroleum lease. Where such application is received, the Minister, if of the opinion that it is in the public interest, may demise such petroleum under specified acreage for such terms, conditions and covenants as considered appropriate. The Minister for Finance is a party to a petroleum lease. Any application for a petroleum lease must include the outline development, financial and marketing plans and outline environmental impact for the exploitation of the discovery based on the applicant's considered likely production profile. There are no such applications on hand in my Department as no oil or gas discovery has been established as being commercial in recent years.
The fiscal terms that apply to production from a petroleum lease are determined by the date of the award of the initial petroleum exploration authorisation, i.e. a licensing option, or exploration licence. Accordingly, production from a petroleum lease arising from an exploration authorisation granted in 2005 would be subject to the 1992 Fiscal Terms, while the 2007 terms would apply in the case of an exploration authorisation granted in 2011.
