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Oil and Gas Prospects
Ireland’s Energy Opportunity
Ciarán Ó hÓbáin
Department of Communications,
Energy and Natural Resources
17 October 2012
Presentation Outline
Exploration activity levels offshore Ireland
Looking forward – 2013/14
Challenges faced by industry\regulators
Unconventional gas exploration
Public debate, especially on tax terms
Ireland increasingly attractive for investors
Government role going forward
Conclusions
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Year
Nu
mb
er
of
EL
& L
O (
at
en
d D
ec
em
be
r e
ac
h y
ea
r)
Number of Offshore Exploration Licences and Licensing Options at end December each year (1970 - end April 2012)
Exploration Licences
Authorisations issued
prior to 1976 were
Petroleum Leases
Licensing Options 1998-2012
End of year information for Licensing Options
prior to 1998 is in offsite archive and not readily accessible
LICENCES AND LICENSING OPTIONS
Number of Exploration Companies (2000 - 2011)
-10
-8
-6
-4
-2
0
2
4
6
8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Nu
mb
er
of
Co
mp
an
ies
Companies Departing
Companies Entering
Net Change in Number of Companies Active inIreland
Number of Exploration Companies (2000 - 2011)
-10
-8
-6
-4
-2
0
2
4
6
8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Nu
mb
er
of
Co
mp
an
ies
Companies Departing
Companies Entering
Net Change in Number of Companies Active in Ireland
Looking forward to 2013/14
Barryroe, appraisal work to continue
Renewed active interest in the Celtic Sea
Increase in drilling activity levels
Some very interesting wells being planned
Decisions by 13 Licensing Option holders
New data acquisition
Next Licensing Round?
Backdrop at EU and International Level
Ever greater level of scrutiny post Macondo
Ireland, additional oversight measures for
drilling
EU legislation on Offshore Safety
Further EU intervention on environmental
liability?
Shale Gas Exploration
Three onshore Licensing Options granted 2011 - Cavan, Clare, Leitrim, Roscommon and Sligo
Work is primarily of a desktop study nature
Drilling not allowed under these Licensing Options
EPA published preliminary research May 2012
EPA scoping a further more comprehensive study
Minister confirmed no hydraulic fracturing until results of EPA research have been considered
Public Debate on Licensing Terms
Attracts considerable media attention
Tax terms especially, Compare like with like?
Myths can quickly become facts
Nature of reporting by Industry has an
impact!!
Some Quotes – Irelands Tax terms
“Government approves scandalous give away of
Ireland’s remaining offshore prospects” (Colm
Rapple, Irish Mail on Sunday, 20 June 2010)
“Time to take tough decision on oil and gas”
(Fintan O’Toole, Irish Times, 4 January 2011)
“Oil conjures up every lazy stereotype of the
ruthless multinational plundering our assets”
(Kevin Myers, Irish Independent, 7 January 2011)
Some Myths
Tax terms with write off of exploration expenditure
means almost no tax revenue for Ireland
Should focus on renewable energy and leave gas in
ground
Leave in ground until price goes up
No obligation to land\sell in Ireland means likely to
be developed and sold elsewhere
Some Very Recent Quotes
“None of the finds being talked about
are so great as to dwarf the exploration
costs”
"We are very excited about it. We think
we could be on the verge of a huge oil
and gas find"
Ireland – Attractive for Investors
Prospectivity - Since 2000 Ireland has had four new
discoveries from only 14 wells, Dooish, Bandon, Old
Head and Schull
Strong market demand, import dependent
Extensive all island gas network
Interconnectors with UK (a net gas importer)
Modern appropriate regulatory framework
Regulatory Framework
2006 Critical Infrastructure Act
2010 Petroleum Safety Act
Foreshore Licence process to be combined with
Critical Infrastructure assessment process
Corrib pipeline – application to consent in 9 months
Transparency, maximising access to information and
meaningful public consultation are all critical
Government role going forward
Maintain effective regulatory framework
Continue to promote investment opportunity
Continue to support, encourage, develop and
participate in research projects
Take steps to address data gaps
Develop and manage appropriate and
innovative licensing initiatives
Conclusions
Interest and activity levels on increase
Some encouraging recent results
Drilling levels low, but set to increase over next few
years
Strong demand and good access to market
Modern regulatory framework that is fit for purpose
Need for more drilling and to broaden area of focus
Atlantic Ireland Conference 12 November