HOUSTON – Three months ago the Irish government awarded 14 new licensing options that give companies access to offshore blocks for two years, resulting in a well-received response, a panel discussed at OTC. The offshore licensing round received 43 applications, the most in Ireland’s history.
Interest in the country’s offshore sector has heightened recently due to several changes, with the most notable being the new petroleum tax, increasing the maximum tax rate on oil and gas fields from 40% to 55%. The “Petroleum Production Tax” is to ensure that discoveries made under future exploration licenses will result in an increased financial return to the State and at an earlier point in time. It will replace the Profit Resource Rent Tax.
Brian Carroll, Department of Communications, Energy and Natural Resources, Ireland, also stated that modern seismic, as well as the country’s existing infrastructure, and its favorable fiscal regime will continue to draw in explorers, despite only a few discoveries being made in the country’s waters.
Ireland’s offshore is vast but underexplored, with many newcomers looking to tap into the North Atlantic Jurassic oil source superhighway, he stated. In the latest licensing round, 17 companies submitted applications including new companies to Irish waters.
More than 135 prospects have been identified with primary reservoirs in Tertiary, Cretaceous, Jurassic, Triassic and Devonian. The Porcupine basin, an area that has not seen much activity, is reportedly anticipated to hold as much as 1.5 Bbbl. However, this area is deep and harsh, and any discoveries made will be costly to bring into production.
But with the combination of the potentially large resource sizes and a favorable fiscal regime, now is the time to tap into this market, due to the country’s recent initiatives to support effective exploration, he added.