Vol. 568 No. 2
168 Mr. Ferris asked the Minister for Communications, Marine and Natural Resources if, in view of the recent decision by An Bord Pleanála to reject the planning application by a company (details supplied) to build a gas facility at Bellanaboy Wood, his Department will now consider changing the licensing, royalties and revenue conditions which apply to mineral exploration companies operating within the State. [16159/03]
The refusal of planning permission by An Bord Pleanála for the proposed terminal at Bellanaboy Bridge for the development of the Corrib gas field was made solely in relation to certain technical issues concerning the moving and relocation of large volumes of peat. The Corrib gas field was discovered in 1996 under Frontier Exploration Licence 3/94. The 1992 terms apply, and will continue to apply to this gas discovery.
The present licensing terms and financial and fiscal regime were introduced in 1992 to keep exploration in Ireland at a sustainable level. These addressed the falling levels of both exploration and commercial finds, and sought to make exploration in Ireland attractive when the industry in several other countries in north west Europe were enjoying commercial finds. The terms and financial regime have been implemented, without change, by every Government since then.
Despite the relative attractiveness of these terms, no company has benefited from them to date. The terms are, of course, only of benefit where a company makes a petroleum discovery, and the discovery is commercial, and is developed, and its development is profitable.
The terms reflect the realities that Ireland has not had the commercial success in oil and gas discoveries that for example the UK and Norway have had. They are necessary to attract exploration interest, due to the conditions in the Irish offshore. The average water depth in the North Sea is 200 metres, and a well costs up to €8 million. This compares to depths of up to 2,500 metres in the Porcupine Basin where a well could cost in excess of €20 million. The Dooish well was drilled in almost 1,500 metres of water. Lack of commercial finds has resulted in an absence of infrastructure in terms of production platforms and pipelines. This means that an operator with a commercial find, such as Corrib, has to build its own infrastructure and this adds to the development cost, perhaps by hundreds of millions of dollars.
Under the Kinsale leases royalties have been paid at 12.5% of gas sales. These have amounted to approximately, €134, million up to end-2001.
