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Monday 22 March 1999

Dr Michael Woods, T.D., Minister for the Marine and Natural Resources today announced the award of two Frontier Petroleum Exploration Licences under the South Porcupine Licensing Round. The Licences, which are valid for a period of 15 years, were awarded to Agip Ireland (six-block licence) and Elf Exploration Ireland (five-block licence). Dr Woods said, "I applaud the commitment of both licensee companies to Ireland and their foresight in undertaking exploration and work programmes in the South Pourcupine Basin". "I believe the South Porcupine Basin has significant potential for both oil and gas discoveries. When this Licensing Round was announced in June 1997, the hydrocarbon potential of the area was very poorly understood, because of the limited data available. Since then a large amount of data has been acquired and interpreted and this has enabled knowledgeable assessment of the petroleum prospectivity of the area for the first time", he added. The two companies have been active in the Irish offshore since the 1970s. Agip currently hold interests in three Frontier Exploration Licences covering 16 blocks while Elf also hold interests in three Frontier Exploration Licences in 12 blocks. Under the new licences, both companies will undertake comprehensive licence-specific work programmes. These will involve the acquisition and analysis of 2-D seismic data and the carrying out of special geophysical and geological studies. Minister Woods said that the response to the Round was as had been expected. He stressed that many exploration companies had a high level of interest in this Round but for some this did not translate into an application. "This was almost entirely due to the marked fall in oil prices during 1998 to the current historical low and the expectation that it will remain low in the short to medium term. I am aware of the very recent factors which led to the sharp rise in the price of oil to its current level of close to $13.5 a barrel. There is no certainty that this new level will be maintained". "Many exploration companies indicated to me that they had carried out detailed reviews of the data from the South Porcupine and saw considerable prospectivity in the area. In the prevailing circumstances it is very difficult for management to justify applying for new frontier acreage", he added. Dr. Woods said he was greatly encouraged by the Corrib Field gas discovery last year and the excellent test results achieved by Enterprise Oil. He also welcomed the news that the company are making preparations to return again this year to drill a further appraisal well. "This is coming at a time when current gas production at Kinsale is expected to approach the end of its economic lifespan early in the new millennium and further indigenous production would be timely and welcome. 1,340 billion cubic feet of gas has been produced from the Kinsale/Ballycotton fields over the past 20 years. This has provided some 20% of Ireland's energy needs and realised cumulative savings on our energy import bill of over £3 billion over the period", said Dr. Woods. "Nevertheless, all our oil and 30% of our gas requirements are imported and the challenge now is to reduce reliance on imported energy by developing further Irish hydrocarbon production", he added. The Minister said that exploration activity in Ireland’s offshore remains at a near record level, with 25 exploration licences, each with significant work programmes currently in place. ''I will continue to work closely with the exploration companies to realise the potential of our offshore resources. I will also strive to ensure that we make every effort to bring hydrocarbons ashore", he said. "The Petroleum Infrastructure Programme (PIP), which I launched in February, 1998, is now also fully operational. This initiative brings together all companies licensed under the Rockall and South Porcupine Rounds to co-operate in the gathering and sharing of research information which no one company on its own could afford to acquire", he added. Frontier Petroleum Exploration Licences under the South Porcupine Licensing Round; Licensee No. of Blocks Blocks Agip Ireland 6 43/19, 43/20, 43/24, 43/25, 43/28, 43/29 Elf Exploration Ireland 5 44/18, 44/23, 44/24, 44/29, 44/30. ends... For further information contact: Denis Maher Department of the Marine and Natural Resources Phone: (01) 6199200/6621606 (dir), 087 565927, Fax: (01) 6766161 press_office@marine.irlgov.ie