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    Irish Offshore Welcomes Licence Clarity


But more clarity still is needed to keep investors interested.

by: William Powell

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Irish Offshore Welcomes Licence Clarity

The Irish Offshore Operators' Association (IOOA) has received further, welcome, clarification on drilling in upstream licences, it said November 13. It said the government has confirmed in writing that "all existing applications and authorisations can progress through the six standard lifecycle stages for extraction/production of natural gas and/or oil."

The IOOA said it expands upon the principles set out by the government October 30 when it confirmed that all future licencing rounds in the currently closed area offshore (Atlantic Margin – 80%) will be for natural gas only and not oil.

All new licence applications in the currently open area (Celtic Sea, Irish Sea, coastal areas – 20%) will be for natural gas only and not oil, and all applications and authorisations in place before September 23 will not be affected.

However, the concession for gas drilling will need to be framed so it does not deter all exploration activity. As oil and gas explorers often do not know in advance how much of what, if anything, the drill bit will find, there is a risk that some will be deterred from the Irish offshore unless there are measures in place to compensate the considerable costs incurred on unproducible oil finds. Further clarification is expected when the government produces a policy paper in the coming month or so.

Welcoming the clarification, IOOA CEO Mandy Johnston said that it showed that the government recognised "the continuing contribution our members are making so Ireland can meet its energy needs. As the representative body for companies exploring and producing in the Irish offshore we remain fully committed to working with government to ensure Ireland can have energy security for a vibrant economy, while also meeting international commitments."

The  minority government is facing an election in the next few months and the polls show the country is set to return another split parliament with no outright winner. The Greens could be critical to the government's re-election.