Ireland Seeks to Increase Offshore Exploration Activity

Despite the extensive technical work performed in recent years and the demonstration of substantial prospectivity for hydrocarbons in Ireland's offshore basins, the pace of exploration activity has remained stubbornly low, said Ireland's Energy Minister Pat Rabbitte on Oct. 17, when awards for the 2011 Atlantic Margin Licensing Round were announced.

Companies awarded licenses include seven companies new to Ireland: Antrim Energy, Bluestack Energy, Europa O&G, First Oil Expro, Petrel Resources, Repsol Exploration; Two Seas Oil & Gas Ltd. Providence Resources, Chrysaor, Serica Energy, Sosina Exploration and San Leon Energy, which are already active in Ireland, were also awarded licenses.

While pleased with the number of applications the licensing rounds received, Rabbitte expressed concern over the relatively small number of applications received over the large parts of the deeper water basins, where indications show significant petroleum.

Rabbitte added that Ireland's entire offshore area has only seen 14 exploration wells drilled since 2000. On a positive note, the 14 exploration wells yielded four discoveries, including the Dooish gas condensate and Bandon oil discoveries offshore western Ireland, and the Old Head and Schull gas discoveries offshore Ireland's southern coast.

However, only one well of the four discoveries was drilled in the Rockall Basin, while no drilling took place in the Porcupine Basin, "both vast areas with demonstrated prospectivity," said Rabbitte, who believes that the petroleum potential of these basins is not being tested due to the modest amounts of seismic data and local, block-specific focus of seismic surveys.

Rabbitte sees operators' plans over the next two years to drill several prospects offshore Ireland, including some "quite large" prospects, as a positive sign compared to recent years.

One operator, Providence, will spud an appraisal well next month on the Barryroe oil discovery in the North Celtic Sea Basin.

Ireland's Department of Communications, Energy and Natural Resources estimates that Ireland's offshore region holds potential yet-to-find reserves of up to 10 billion BOE.

The Irish Offshore Operators Association (IOOA) noted that successful exploration could help solve the fiscal and economic challenges facing Ireland by providing tax revenues and creating jobs.

However, the low success rate for exploratory drilling; delays in bringing the Corrib gas field into production; absence of infrastructure; harsh operating conditions; and higher operating costs offshore Ireland pose deterrents to exploration, IOOA said.

To date, 130 exploration wells have been drilled offshore Ireland; in comparison, more than 1,000 exploration wells have been drilled in the Norwegian sector and more than 2,000 have been drilled in the UK's offshore area.

All eight licenses issued in the 1995 Licensing Round have been handed back to the government, while 10 of the 11 licenses issued in 1997 have been surrendered. The 2009 Irish licensing round attracted only two applications, with one license awarded.

IOOA's membership roster also has shrunk from 17 members in 1995 to eight member companies at present.

"The only way to prove oil and gas reserves are to drill exploration wells," said IOOA in a statement on its website. "Drilling offshore Ireland is running at around one exploration well per year. In 2009, 23 exploration wells were drilled in the UK sector, with 45 drilled offshore Norway."

Rabbitte is seeking input on ways to encourage more drilling and seismic data activity, bringing new entrants into Ireland and encouraging exploration in Ireland's deeper water basins.

Possible initiatives include changes to Ireland's regulatory framework to encourage activity in under explored offshore areas and using petroleum research funding to leverage additional investment in new data acquisition.

The Plate Reconstruction Project next year, which is being jointly funded by the Canadian Government of Newfoundland Labrador and the Irish-Government-Industry Petroleum Infrastructure Programme, also should provide "exciting new insights into the potential occurrence of petroleum in our frontier basins," said Rabbitte.

The project is expected to be completed next year.


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