Ireland Clarifies Upstream Policy

Ireland’s oil and gas industry has welcomed the government’s release of paper outlining its policies on upstream activity.

Investor confidence in Ireland’s oil and gas industry was shaken in September, when prime minister Leo Varadkhar announced that the country would no longer explore for oil, while continuing the search for gas.

In its paper, released on December 18, the government reaffirmed its support for continued offshore gas development.

“Natural gas is recognised as playing a critical role during this transition,” it stated. “A secure and stable energy supply is essential to underpin the continued functioning and future development of Irish society.”

Ireland draws 60% of its gas supplies from the Corrib field off the coast of Mayo, along with several smaller fields. Advocates for continued exploration say more fields like Corrib need to be found to avoid over-reliance on imports.

The government confirmed that all new licensing rounds held after September 23 would offer gas but not oil permits. Applications and authorisations in place before this point will not be affected by the decision, it said.

The paper also acknowledged concerns that there was no sure way of knowing for sure whether oil or gas would be found at a given site until after drilling. It did not present a solution to this problem, however.

“There are complexities involved in focusing on natural gas exploration to the exclusion of oil and it is acknowledged that there is no single scientific method that can accurately predict whether gas or oil (or water) will be present below the seabed,” it said.

“Current research indicates that the most likely remaining potential in undrilled parts of the basins will be from mixed oil-gas sources,” it added.

Despite this uncertainty, the Irish Offshore Operators’ Association praised the paper for recognising the crucial role of gas in Ireland’s future energy mix and for assuring that existing oil and gas licences would remain in force.

“Ireland finally has a clear pathway for companies who wish to explore off the coast, ending two years of policy uncertainty and regulatory delay,” IOOA CEO Mandy Johnston said. “The government has listened to our arguments and finally accepted that the country needs offshore gas, and will continue to do so for decades to come.”