Gay Mitchell (Dublin South Central, Fine Gael)
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Question 86: To ask the Minister for Communications, Marine and Natural Resources his intentions in regard to ensuring ongoing oil and gas explorations, on and off shore with particular reference to the need for the continuation of exploration and the recognition of the interest of the taxpayer and consumer; and if he will make a statement on the matter. [20728/06]

Bernard Durkan (Kildare North, Fine Gael)
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Question 322: To ask the Minister for Communications, Marine and Natural Resources his intentions in regard to ensuring ongoing oil and gas explorations, on and off-shore, with particular reference to the need for the continuation of exploration and the recognition of the interests of the taxpayer and consumer; and if he will make a statement on the matter. [20806/06]

Noel Dempsey (Meath, Fianna Fail)
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I propose to take Questions Nos. 86 and 322 together.

The shared objective of my predecessors over the last 30 years and myself has been to realise the full potential of oil and gas reserves onshore and offshore Ireland. The following factors have been obvious to every Government and most observers over the last 20 years: that the industry does not regard Ireland's record of prospectivity as attractive, with 4 commercial finds out of 121 exploration wells drilled; that offshore conditions are challenging, with deep waters, long distance of prospective acreage from shore, and lack of infrastructure. The effect of these conditions makes both exploration and development very expensive; that as a result of the prospectivity and conditions, exploration has been low in recent years.

In the light of these factors, licensing terms were introduced in 1987 and fiscal terms were added in 1992 to encourage and promote exploration. The detailed provision of the taxation legislation recognise the operational characteristics of the sector while the regime as a whole achieves a risk/reward balance which reflects Ireland's circumstances and acknowledges the realities of competition for internationally mobile exploration/production investment. That said I am, as I have recently said, about to conduct a review of the present fiscal terms.

This Government, as with previous Governments, has and will continue to promote exploration through licensing opportunities for the petroleum industry. In this way the work, the risks and the cost is undertaken by the private sector at no expense to the taxpayer. Last year there was a licensing round over the North East Rockall area for which two licences were issued. This year a licensing round was held for licences in the Slyne/Erris/Donegal area. The closing date for applications was 15th March and I expect to receive the assessments and recommendations shortly.

While the potential for significant hydrocarbon finds is rather limited in the onshore area, there is a very considerable potential for further commercial discoveries offshore. Unfortunately, Ireland has been viewed by many exploration companies as not being particularly attractive for oil or gas exploration on account of a low discovery rate. However, since much of the region is only lightly explored it must be viewed as an immature petroleum province. To address any negative perceptions and to underpin future licensing strategies, the Minister commissioned a major assessment of the yet-to-find hydrocarbon resource potential for the basins west of Ireland. This assessment, part of which was published last year and the balance nearing completion, is based on the latest data and petroleum system analysis techniques. The work will provide up-to-date and reliable information on the likely distribution and quantity of undiscovered hydrocarbon resources for a large part of Ireland's continental shelf.