"The government has relinquished control over the offshore areas of our industry. Norway was tough regarding oil companies from the start. You now have an almost embarrassingly large pension fund. The situation for Irish communities, however, is as in Ogoniland in Nigeria - oil is a curse,”
Minister for Energy Pat Rabbitte has awarded 13 new licensing options to explore for oil and gas in Ireland’s Atlantic offshore area.
Some 12 companies are involved in the 13 awards, selected from a record number of 15 applications submitted under a bidding system initiated by former Fianna Fáil minister of state for energy Conor Lenihan.
The new licensing round will allow successful companies the first refusal on exploration licences over 250,000sq km of the Atlantic shelf, which is an area about three times the size of the island of Ireland.
Five companies already active in Irish waters and seven new entrants have been offered acreage on the Porcupine, Slyne and Rockall basins under a two-year license agreement.
The five existing companies are the O’Reilly family-run Providence Resources Plc; Chrysaor; Serica Energy; Sosina Exploration and San Leon Energy.
The seven new successful entrants are Antrim Energy; Bluestack Energy; Europa Oil & Gas; First Oil Expro; Petrel Resources; Repsol Exploration; and Two Seas Oil & Gas Ltd.
Mr Rabbitte, who announced the details before opening a conference in Dublin this morning, said he welcomed the significant interest shown. He also rejected criticism that the State oil and gas licensing terms were too preferential.
Fianna Fáil energy spokesman Eamon Ó Cuív and trade union Siptu had urged Mr Rabbitte to defer issuing the licenses until an ongoing Oireachtas review of the State’s terms has been completed.
“Ireland needs to see an increase in exploration activity and exploration drilling in particular, if the petroleum potential of our offshore is to be realised,” Mr Rabbitte said.
“The positive outcome of the 2011 Atlantic Margin Licensing Round will help bring a new momentum to the level of exploration activity in our offshore,” he said. “Ireland must continue to communicate the message to international exploration companies that Ireland is open for business and that the Irish offshore has real potential.”
Stein Bredalm, a former board member of the Norwegian oil and gas company Statoil, told a recent Sinn Féin conference that he could not understand Mr Rabbitte’s approach to the issue, and urged Irish politicians to adopt the Norwegian model whereby the State could build up its own expertise – rather than accepting information from the oil and gas sector.
Mr Rabbitte had been a member of a resources protection lobby group in his earlier political career.
In a related development, Mr Rabbitte’s decision to address public concerns about environmental impacts of gas extraction on land has been welcomed.
Mr Rabbitte has asked the Environmental Protection Agency (EPA) to examine the environmental impact of the gas extraction technique on land known as hydraulic fracturing or “fracking”.
This move has been welcomed by An Taisce, which has urged him to make the EPA findings public. A German Green Party politician Helmut Fehr says the Irish Government needs to lobby the EU for Europe-wide legislation on “fracking”.
Mr Fehr, who recently addressed community groups in Leitrim on the issue, said there was little or no monitoring of the impacts of hydraulic fracturing in other European countries.
“Fracking” involves drilling wells and pumping in millions of gallons of water, sand and chemicals under high pressure to fracture underground shale deposits and open fissures which allow natural gas to flow.
A recent study on shale gas and oil extraction by the European Parliament’s committee on environment, public health and food safety noted that existing mining laws in Europe did not cover “fracking”, and in many cases “mining rights” took precedence over “citizens’ rights”.
Two companies – Tamboran Resources and Lough Allen Natural Gas Company (Langco) - have been granted what Mr Rabbitte has described as “preliminary authorisations” to carry out testing in the Lough Allen basin, which extends across Leitrim, Sligo, Cavan, Donegal, Monaghan, Roscommon and Fermanagh.
Mr Fehr said that the debate about the issue in Ireland was very similar to that currently taking place in his native North Rhine-Westphalia region of Germany, which recently tendered for a risk study on exploitation of “unconventional” resources.
The study will focus on the environmental impact, particularly on the public drinking water supply.
Licensing for “unconventional” extraction methods has been suspended in the German region since March 2011, until the study is completed. Other German states are also watching for its outcome, he said.
Oil and gas exploration companies also needed to be “more transparent”, Mr Fehr said. “The more that companies notice how knowledge is spreading, the more transparent they will have to become,” he said.