Offshore Ireland is not great gas

Rising oil prices always add impetus to the case of Irish exploration, and most expect prices to rise in the next two years

Ireland is seen as an expensive place to explore given the geological difficulties and the market price for the finished product

Ireland is seen as an expensive place to explore given the geological difficulties and the market price for the finished product

 

Good news is rare in the exploration sector focused on Ireland’s offshore potential. Kinsale and Corrib apart, no commercial discoveries of gas have been delivered thus far. And not a drop of commercial oil has yet to trouble the industry or its regulators.

But hope springs eternal. And so a survey by consultants PwC says that almost two-thirds of industry professionals asked were confident of the prospects for the Irish gas and oil sector over the next two years.

Mind you, that is down from 74 per cent last year, and it remains difficult to understand on what basis they remain so upbeat. If you look at some of the other findings, it appears the industry is far from happy with the opportunity presented by offshore Ireland.

The main hurdles to the further development of the industry are not inconsiderable. Close to half complain about the regulatory regime, though others would argue that this is not strict enough.

It’s hard to argue with the 42 per cent who cite our reputation as a location for exploration given the signal failure to extract oil from Irish waters.

On the plus side, however, the “Corrib factor” appears to be dissipating, with just 23 per cent ranking it among “key challenges” compared to 41 per cent last year.

And then there’s the cost. Ireland is seen as an expensive place to explore given the geological difficulties and the market price for the finished product.

Rising oil prices always add impetus to the case of Irish exploration, and PwC says an “overwhelming” 80 per cent expect prices to rise in the next two years. The best guess – from 50 per cent – is that they will be in the $60-$70. That’s hardly a revolutionary vision as prices have been in the $70-$85 bracket for the past seven months.

In keeping with what you might expect from a survey by a Big Four consultant that might find itself representing industry interests at some point, the Petroleum and Other Minerals Development (Amendment) Bill which would bar future exploration on climate change grounds comes in for a sound kicking.

Of course, given our success to date in actually finding and commercialising oil, that might be academic.

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