Huge possible benefits in offshore drilling, says group

THE Irish Offshore Operators’ Association has called on the Government to better promote Ireland as a viable target for overseas oil and gas exploration companies; adding that the development of even one major oil discovery off the Irish coast could deliver nearly €16 billion in direct taxes to the Exchequer.

While the association concedes that a large find from one of the few companies currently exploring in Irish waters — Providence Resources has high hopes for prospects it co-owns (one with US giant, ExxonMobil) off the east and west coasts — would probably bring a flood of overseas players into the market, it also feels the Government needs to do more to make Ireland more attractive to potential explorers.

It says the low success rate of exploratory drilling to date — only three commercial finds in Irish waters in 30 years — the delays in bringing the Corrib gas field into production, an absence of drilling infrastructure and the high cost of operating have all contributed to a lack of interest.

“There is a perception, internationally, that public and political support for the Irish offshore industry is low,” said the association.

The opposition was quick to pounce yesterday. Fine Gael’s energy spokesperson, Leo Varadkar said: “As the price of oil and gas rises and resources in the North Sea and the Gulf become depleted, we believe there will be renewed interest in exploration off the coast of Ireland.”

Ireland’s most recent licensing round, last year, attracted two bids; while the last round in Britain attracted 350 bids. Results from Ireland’s latest licensing round — for the Atlantic Basin region — are due next summer.

“We need to learn from the mistakes of the past and put in place a transparent, robust and legally binding administrative and regulatory regime for field development, so that all stakeholders have a clear understanding of the issues involved and how they’re to be addressed,” said the association.

Irish-based explorers are taxed on 25% of their profits from any operating wells and by a further 15% if those are very profitable.