Irish Oil and Gas: Acting on the Bonanza
Ireland is surrounded by potential hydrocarbon wealth, so why is nobody doing anything about it?
The question was put early in the Ireland Oil & Gas Summit, held this week/last week at a hotel in south county Dublin.
Ireland is open for business, according to senior civil servant Ciaran O hObain, from the Department of Communications, Energy, and Natural Resources. The department has promised a new licensing round for 2014.
The conference was opened by junior energy minister, Fergus O'Dowd, who referred to the country's last successful licensing round in 2011, which resulted in 11 of 13 options being converted to full exploration licences.
New entrants include well-known companies Woodside, Cairn, and Kosmos.
As speaker after speaker detailed the likely rich reserves of gas and oil lying underneath the ocean to the south and west of Ireland, it seemed there was a bonanza lying around waiting to be realized.
Martin Larsen of EP Consult Energies spoke for many when he asked “why is nothing happening?”
But the extractive industry is not easy, cheap or quick, and Ireland also has to pursue opportunities more aggressively.
Ireland is 100% dependent on exports for oil and 95% for gas. The commodities are not getting any cheaper, and reliance on foreign providers can be fraught with problems – just ask the Ukrainians, who have been subject to regular cut-offs or threats from Russia, which supplies nearly all of its gas.
The summit, which brought together dozens of senior personnel in hydrocarbon companies – geologists, economists, physicists – was given several presentations about potential in areas such as the Celtic Sea Basin and the Porcupine field.
Stephen Boldy of Lansdowne Resources presented data, including seismic images, indicating promising seams under the Celtic Sea Basin. “The Basin is under-explored, and there is a lot yet to find,” he said.
Lansdowne already owns rights, through subsidiaries, to five exploration licences and one licensing option in the North Celtic Sea Basin (NCSB). It also shares the licence in Barryroe with its operating partner, Providence.
Paul Griffiths, managing director of Fastnet, also emphasized the potential of Irish waters at the conference. Fastnet has a 100% working interest in the East Mizzen Licensing Option, off the south-west tip of the country. Earlier this year Griffiths said the area was "particularly under-explored, yet highly prospective".
He also reminded his industry colleagues that the Kinsale gas field, in the Celtic Sea, was the “largest gas field ever” in the region. “I would challenge anyone, anywhere in the world, to find a filed that has performed as well as this gas field,” he said.
“We should not be surprised that there is a lot of talk about potential in the Celtic Sea,” he said, arguing that the Celtic Sea should have received the same focus from explorers and investors as the Atlantic Margin.
“Much has been said about Barryroe, but there could also be a second or third well [as good],” Griffiths said in his presentation.
He also claimed that the business and fiscal environment in Ireland, currently emerging from a recession, was promising. “There is a good tax regime in Ireland to facilitate exploration.”
Earlier, O hObain of the energy department had urged those considering exploring in Irish waters to contact his department – “please talk to us,” he said.
David Horgan, chief executive of Petrel Resources, said: “The problem in Ireland has always been lack of exploration.” Attempting in his talk to answer Larsen’s question, he said one reason Ireland has not succeeded, as a hydrocarbon producer so far was the ‘herd instinct of investors’. “The herd is currently grazing in north Africa,” he joked. Another factor was energy price collapses after previous initial research in past decades, which had also dissuaded explorers.
Another presentation dealt with the new liquefied natural gas terminal proposed by Shannon LNG, at Tarbert in County Kerry, in the southwest of Ireland. This has been a long-drawn out and controversial project, whose supporters said it would both provide much-needed employment in the region, and ease Ireland’s energy predicament.
Martin Regan of Shannon LNG spoke of Ireland’s pressing need to ease its reliance on gas imports. Although the controversial Corrib pipeline built by Shell will soon come onstream, Regan pointed out that its effect will be relatively short-lived. “It will be in depletion by the late 2020s,” he said.
Shannon LNG is a wholly owned subsidiary of Hess LNG Limited. Various regulatory and environmental issues have protracted the building of the terminal, which would be Ireland’s first.
The two-day conference was organized by IRN of London. The first day mostly considered the potential of unexplored fields in Irish waters. Natural Gas Europe was not present on the second day – when a group of anti-fracking protesters picketed the hotel. Hydraulic fracturing has not taken place in Ireland, and the national Environment Protection Authority is studying the subject for a report to government.
Angela Long