Minister Ryan welcomes interest shown in new oil and gas exploration opportunities in the Porcupine Basin
Dublin Monday 31/12/2007
Applications all under new tax regime
Eamon Ryan, Minister for Communications Energy and Natural Resources, today announced that four applications have been received for Frontier Exploration Licences in the Porcupine Basin Licensing Round.
Applications were received from the following groups:
● ExxonMobil, Providence Resources and Sosina Exploration – two applications
● Island Oil and Gas and Supernova Ireland Resources BV
● Providence Resources, Sosina Exploration and Challenger Minerals
Welcoming the applications Minister Ryan said that he was encouraged by the number of applications and the experience of the companies involved, all of whom are currently engaged in existing exploration licences in the Irish Offshore. Minister Ryan said "I hope that the applications received under the Round will lead to the discovery and development of new hydrocarbon resources and reduce Ireland's long term dependence on energy imports. The applications received represent a further indicator of the upswing in the level of exploration investment offshore Ireland in recent years which has been evidenced by the growth in the number of exploration authorisations along with a corresponding increase in the level of drilling activity."
Minister Ryan confirmed that any licences granted as a result of the Porcupine Round would be subject to the revised licensing terms which he announced earlier in the year which provide for a tax take of up to 40% in the case of more profitable discoveries.
"I am pleased that all applicants, if successful, will fall under the new tax regime. Their interest proves that the balance struck in the new regime is the right one. The potential return to the state was considerably increased, while retaining the attractiveness of Ireland for oil and gas exploration."
His Department will conduct a detailed evaluation of the applications received and decisions on the applications will be made by end January 2008.
Note for Editors
As well as the new higher taxes, all companies granted licences will also have to fulfil the following stricter non-fiscal terms when they explore for oil and gas off Ireland's shores.
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Duration of Licences
- The duration of deepwater licences will be reduced from 12 years to 9 years and the minimum period for a frontier licence will be reduced to 12 years.
- Terms will explicitly state the Minister's power to vary both the duration of individual phases of a licence as well as the overall duration of a licence.
- The introduction of an automatic relinquishment provision of 50% of the area covered by a Standard Exploration licence or a Deepwater Exploration licence at the end of the first phase of a licence
- The introduction of an automatic relinquishment provision of 25% of the area covered by a Frontier Exploration licence at the end of the first phase of a licence
- An automatic relinquishment of 50% of the remaining area covered in the case of all exploration licences at the end of the second phase of a licence.
- Retain the current level of rental and application fees, subject to annual increases in line with CPI.
Confidentiality period for Well Data
- The confidentiality period for well data will be reduced from 5 to 4 years.
Drilling Commitments & Work Programmes
- Work programmes will be required to set out clearly the timing of the works proposed.
- There will be no change in drilling obligations in the case of standard and frontier exploration licences. In the case of a deepwater licence the first well to be drilled in the first 3 years of the licence (4 years at present) and a second well must be commenced by the end of the 6 th year (8 years at present).
Moving to Development Phase
- The time allowed for the submission of a plan of development will be reduced from 2 years to 1 year from the date a petroleum lease has been signed.
- It will be provided that a lease undertaking may follow on from either an exploration licence or a licensing option and that the information required from the applicant will be the same as that required from a company that is applying for an exploration licence.
- There will be clarification that award of a reserved area licence is not automatic; that the Minister may impose conditions; and that the area concerned must be contiguous with the existing lease area.
Categories of Authorisation
- all the existing categories of authorisation should be retained (no change).
For further media information, please contact:-
- Brid McGrath, Press Advisor: Office +353 1 678 2440 / Mobile: 087 770 8631