Tough decisions on oil and gas

 

Madam, – Fintan O’Toole (“Time to take the tough decisions on oil and gas”, Opinion, January 4th) conjures up the ghosts of Ray Burke and Bertie Ahern in relaxing Irish licensing terms for oil and gas. In fact, the process was begun by Dick Spring, and only after the governments of Norway and the United Kingdom had relaxed their terms in response to a decline in exploration.

As recently as 2007, the terms were subjected to a review by Indecon International, which was initiated by Minister for Natural Resources Noel Dempsey and which reported to his successor Eamon Ryan.

Its report is available on the website of the Department of Communications, Energy and Natural Resources. It concludes that while the fiscal terms were broadly appropriate to the stage of development of the industry in Ireland, it recommended a number of changes which have generally been implemented.

The question remains that, if the terms are so favourable to the industry as suggested by Mr O’Toole, one would expect a queue for exploration licences. The opposite is the case.

Ten years ago, our association had 16 member companies. Now we have eight.

All of the eight exploration licences issued in 1995 have been handed back to the department.

Of the 11 licences issued in 1997, 10 have been surrendered.

The most recent Irish licensing round, in 2009, attracted only two applications, with one licence being issued. A similar round in the UK attracted 350 applications, with some 145 licences being issued.

It is generally regarded as foolish to kill the goose which has laid a number of golden eggs. Mr O’Toole seems to believe that we should kill the goose before it has laid any eggs at all! – Yours, etc,

FERGUS CAHILL,

Chairman,

Irish Offshore Operators’ Association,

Dartry Road,

Dublin 6.