Firms ‘waiting’ to exploit oil find off Connemara, says TD

The Government will decision on the tax regime for oil exploration next year and has admitted that 16,500 barrels of oil were removed off the Connemara coast in 1997.

Independent TD Richard Boyd Barrett yesterday held up a small container of crude oil in the Dáil which he claimed was from the find.

Junior energy minister Fergus O’Dowd admitted a tanker called the Berge Hugin took the oil away but that Statoil ultimately decided the field was not commercially viable.

It is the first time the tanker and number of barrels were identified in the Dáil, according to online Oireachtas records.

Ireland applies low taxes to companies drilling for oil here in a bid to attract business. The tax regime is under review and Mr O’Dowd said a decision will be made early next year.

Mr Barrett said governments had said since the early 1970s that there were four gas finds but no oil finds. He claimed it had now emerged that a tanker of oil had been pumped out of the Connemara field in 1997.

Following technological developments, oil companies had expressed renewed interest in the field, he argued.

“A week’s pumping filled the tanker... They [companies] know there is not potential oil down there, but real oil. They are waiting for an opportune moment to extract it, just as property developers sat on land banks for ages until they could get maximum profits,” he said.

Mr O’Dowd said: “Oil recovered from the test was transferred directly to the tanker Berge Hugin instead of being flared off. The cumulative volume of oil recovered during the entire 69-day test was 16,500 barrels.”

He said Statoil relinquished acreage of the field to the State in Oct 1999.

But Mr Boyd Barrett said that although the Connemara well — named block 26/28-A1Z — was plugged, former Statoil director Stein Bredal had since stated doing so was a “mistake”.

Mr Bredal said the Connemara field may be “commercially viable”, the TD said. There was no justification why the State’s low tax rate for exploration companies and the level of royalties was still low, he said.

Mr O’Dowd said the Government wanted more companies to take interest in oil exploration off the coast. Areas in the Atlantic would be open for exploration next year, he said, and the State was spending €20m to study geological and seismic conditions. “No one is sitting on the oil because no one has it.”

The minister said that the issue of taxation on oil revenues was being considered.