Other Questions. - Offshore Exploration.

Thursday, 8 February 2001

Dáil Eireann Debate
Vol. 530 No. 2

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[336]

  10.  Mr. M. Higgins  Information on Michael D. Higgins  Zoom on Michael D. Higgins   asked the Minister for the Marine and Natural Resources  Information on Frank Fahey  Zoom on Frank Fahey   if he will make a statement on the declaration of commerciality by the Corrib Gas Field Partners; when gas is likely to be brought ashore; and the information which is available with regard to the extent of the reserves. [3350/01]

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  Last month Enterprise Energy Ireland, acting as operator for the development of the Corrib Gas Field, declared it commercial on behalf of its co-venturers, Statoil Exploration (Ireland) Ltd and Marathon International Petroleum (Hibernia) Limited and sought a lease from me for its development. This is currently being considered and evaluated by my Department. Enterprise Energy Ireland has plans to bring the gas ashore by October 2003 and expects the field to be in production for about 15 years.

All data and information relating to the field are submitted on an ongoing basis by the company to my Department, where it is analysed using in-house expertise in conjunction with consultants. The Deputy will appreciate that all material associated with the assessment is commercially sensitive and must, therefore, remain confidential. However, Enterprise Energy Ireland is reported as saying Corrib Field might have in place recoverable reserves of more than one trillion cubic feet of gas.

Mr. Bell: Information on Michael Bell  Zoom on Michael Bell  Is the Minister satisfied that the operation of the programme for this field is on time and that it will deliver as scheduled and announced by the company?

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  It is difficult to assess that at this stage, given the planning difficulties that have arisen and were not anticipated by the company. Its original target date to bring oil ashore was January 2003 but that has been put back to October 2003 and is dependent on a positive outcome to the dispute in County Mayo as a result of objections made to the county council and possible objections being made to An Bord Pleanála. It is difficult to say if that time scale can be achieved.

Mr. Higgins: Information on Joe Higgins  Zoom on Joe Higgins  (Dublin West): Has the Minister made an approximation of the total value to Enterprise Oil of one trillion cubit feet of gas?

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  No, I have not.

Mr. Higgins: Information on Joe Higgins  Zoom on Joe Higgins  (Dublin West): Does the Minister believe the Government should assess the total wealth that is there and in light of that examine the deal worked out with Enterprise Oil in 1992, which gave it the entire field for nothing as far as the Irish people are concerned?

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  Thankfully, we live in a country where when one signs a contract with somebody one keeps it and does not change it before it expires.

Mr. Connaughton: Information on Paul Connaughton  Zoom on Paul Connaughton  Deputy Higgins is worried about what has happened at sea, but I am more worried about what happens on land when the [337] gas is brought ashore. What priority will Bord Gáis have in terms of the customers such gas supply will be aimed at and the general priority it will use to distribute this most important gas find?

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  That Bord Gáis has indicated it will service the towns adjacent to the pipeline and that it and the Government are spending £300 million on bringing the gas pipeline to the west indicates that it is the policy of the Government and Bord Gáis to supply gas throughout the country as quickly and efficiently as possible. One of the benefits to the west will be that towns of an adequate size will be able to receive natural gas. The major advantage to the west will be that, for the first time, there will be an energy source that can be used to generate electricity. This will create the possibility of attracting large scale industry which up to now the IDA has had to refuse, particularly in the pharmaceutical and heavy engineering areas and, most recently, the development of web farms.

The gas itself will be of benefit, but its use as a power source for electricity generation will be a much bigger advantage for counties in the west such as Mayo, Galway and Sligo. This is where the main economic advantage for the region lies. We must ensure that unreasonable delays are avoided in respect of objections. As I said in response to Deputy Ring, we respect everybody's right to object and to make their point of view known. However, it would be sad for the west if long delays were caused by objections which did not ultimately stand up. All of us as Deputies from the west should try to ensure that responsibility is exercised on the part of people who make objections.

  11.  Mrs. B. Moynihan-Cronin  Information on Breeda Moynihan-Cronin  Zoom on Breeda Moynihan-Cronin   asked the Minister for the Marine and Natural Resources  Information on Frank Fahey  Zoom on Frank Fahey   his proposals to ensure that the west will benefit from the Corrib gas field; and if he will make a statement on the matter. [3348/01]

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  The Deputy is probably aware that the Corrib Group declared the field commercial on 9 January 2001. It has submitted an application for a petroleum lease and is at present finalising a plan of development – POD – for the gas field. As the Government Minister from the west with responsibility for offshore oil and gas developments, I am determined to ensure that the west receives its full share of benefits from the Corrib gas.

The configurations of distribution downstream gas pipelines will be a matter in the first instance for Bord Gáis Éireann – BGE – the Minister for Public Enterprise and the Minister of State in that Department. As the representative in Government for the western region, I have been pursuing vigorously with both Ministers and Bord Gáis the provision of gas supply options for the west. My priority is the extension of the gas net[338] work and a new supply off the west coast to accelerate economic development in the Border, midlands and western regions.

I recently discussed with the chief executive officer of Bord Gáis the provision of a natural gas supply to towns adjacent to a proposed pipeline between Rossport, County Mayo, and Craughwell, County Galway, to link with the proposed pipeline spur from Dublin to Galway. The BGE response was positive and the company also said that it has plans for towns such as Castlebar, Claremorris, Tuam and Athenry to receive a natural gas supply. The Dublin-Galway ring main will also bring natural gas heating to homes in Galway city and Oranmore and facilitate gas powered electricity generation in Connacht.

I will also pursue with my ministerial colleagues in the Department of Public Enterprise the question of building a further pipeline from Pollatomish via Ballina to Sligo to service towns in north Connacht as a first phase to bring a gas supply to the whole north west region. Bord Gáis has indicated that this will require further Government investment. The Government is committed to ensuring that the necessary pipeline infrastructure is in place to bring gas to domestic and commercial customers in the west.

Mr. Bell: Information on Michael Bell  Zoom on Michael Bell  Will the Minister indicate who will be responsible for setting the sale price of the gas to industry, commercial activity and domestic users? Will it be the company, Bord Gáis or the Department or a combination of all three?

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  The gas will go into the national grid and will have to compete with gas from other sources. Competition will be most important in that respect. While Bord Gáis is the semi-State body with responsibility for the distribution of gas, several companies sell gas through Bord Gáis pipelines. There is competition between a number of companies supplying gas through the current national gas pipeline infrastructure. It is the Government's view that there should be open and transparent competition so that the price of gas for consumers is at the lowest possible level.

Mr. Higgins: Information on Joe Higgins  Zoom on Joe Higgins  (Dublin West): Enterprise Oil stated in a letter to me that its exploitation of the gas will ensure security of supply for the country. Does the Minister agree that is not the case because the company could decide to sell it to a higher bidder outside Ireland? What assurances exist in terms of security of supply? For how long has it been guaranteed? Have such guarantees been given?

Does the Minister agree only an incompetent farmer would bring his or her cow to the fair without knowing what price to ask for it or its value? Does he agree it is extraordinary that the State gives to multi-national corporations a substantial tranche of the mineral wealth of the country without even putting a value on it? Does he [339] agree the people are being sold down the drain in this regard?

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  To use the Deputy's analogy, there must be a fair before one can bring the cow anywhere. In 1992 nobody was interested in exploring the Atlantic coast of Ireland and it was necessary for the Government to offer attractive terms to generate interest among the international exploration community. However, these terms are not much more attractive than those available to the companies throughout the world.

Mr. Higgins: Information on Joe Higgins  Zoom on Joe Higgins  (Dublin West): What about Norway?

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  Norway drilled 7,000 wells during the period in which 30 wells were drilled off the Irish coast. One cannot make such comparisons. If Ireland was lucky enough to have anything even like the smell of success experienced by the Norwegians, we would change our terms very quickly.

The Deputy should not be disingenuous. We have had unbelievably good luck in finding a well and we cannot now go back and try to change the terms on which the companies explored for gas. However, I assure the Deputy that the matter is kept under review at all times. If there is continuing progress, as we hope, the possibility of considering the terms will arise.

  12.  Mr. O'Shea  Information on Brian O'Shea  Zoom on Brian O'Shea   asked the Minister for the Marine and Natural Resources  Information on Frank Fahey  Zoom on Frank Fahey   the latest information available to his Department with regard to the Helvick oil field; if any information is available from the test drilling undertaken in summer 2000; and if he will make a statement on the matter. [3353/01]

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  Providence Resources completed an appraisal well on the Helvick oil field in the Celtic Sea in September last year. The drilling and tests results have been reviewed in detail over the last few months. I already gave a similar reply to a previous question. I do not understand why the questions were not grouped.

Mr. O'Shea: Information on Brian O'Shea  Zoom on Brian O'Shea  I thank the Minister for his reply. What is the projected daily output of this field and its total capacity? How would the capacity relate to the national requirement for petroleum in the course of a year? Is there any indication that the field is viable?

Mr. Fahey: Information on Frank Fahey  Zoom on Frank Fahey  In response to the earlier question, I informed the House that the field was considered uncommercial and has been abandoned.


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