John Browne Seeks to Boost Petroleum Exploration
Minister of State at the Department of Communications, Marine and Natural Resources, Mr. John Browne, T.D., has approved with immediate effect revised terms for the Licensing Option authorisation for oil and gas exploration offshore Ireland.
The objectives are to rejuvenate exploration in the Celtic Sea, and possibly other areas in the future, and to make the Licensing Option a more attractive measure for promoting exploration activity in Offshore Ireland. The revisions affect the cost and duration of these authorisations, and will reduce their cost to the industry.
Both Minister Browne and Minister Ahern are concerned that exploration interest and activity levels in Offshore Ireland have declined in the past five years and are currently at a very low level. While this decline reflects similar pattern in other countries in north west Europe the Government are anxious to maintain exploration activity at a sustainable level and to make the sector more accessible to small and independent companies.
The revised terms recognise the need for Ireland to make its Celtic Sea exploration rental terms more competitive and flexible along the lines adopted by the U.K. in its recent North Sea Round. The adoption by the U.K. of more competitive terms through its Promote programme has rejuvenated interest by the independent sector in the offered acreage in the North Sea.
Minister Browne stated, "It is important for the State to boost its offshore exploration activity levels. The supply of energy from indigenous sources needs to be increased from its present low levels."
Details of the revised terms are:
- the duration of a Licensing Option shall be determined by both the work programme agreed and the commercial considerations of the applicant. It shall be for a period of one, two or three years but a shorter period may be agreed for particular work programmes;
- the Minister may extend the Licensing Period by no longer than 12 months beyond the original expiry date on the basis of both a further agreed work programme or specific commercial considerations or both. However, no Licensing Option plus an extension should exceed a period of three years;
- rental fees to be reduced with immediate effect to those for Phase 1 of Frontier Exploration Licence - €27 per square kilometre. This rate to apply also to any extension beyond the original terms.