TWELVE companies from four countries have been awarded licences by the Government to look for oil and gas off the Irish coast, despite criticism of the licensing process.
Energy Minister Pat Rabbitte yesterday finally awarded the licences to start exploring around Ireland. The majority of them are in the 'Atlantic Margin' -- an area off the west coast about three times the size of Ireland.
The Government awarded 13 licences in total -- nine in the Porcupine basin off the west coast; one in the Rockall Basin to the north of Porcupine; another in the Slyne Basin off Donegal and two in the Goban Spur Basin off the south-west of the country.
Five of the winning companies -- Ireland's Providence Resources and San Leon Energy, and the UK's Chrysaor, Serica Energy and Sosina Exploration-- already have a presence in Ireland.
The other seven licence winners -- Canadian firm Antrim Energy, Bluestack Energy and Petrel Resources from Ireland, the UK's Europa Oil & Gas, Two Seas Oil & Gas and First Oil Expro, as well as Spanish firm Repsol Exploration -- are new to Irish waters, although Repsol recently announced it was entering into another licence off Ireland with Providence.
In announcing the licences, Mr Rabbitte said Ireland "needs to see an increase in exploration activity, and exploration drilling in particular, if the petroleum potential of our offshore is to be realised".
He added that the high interest in the licences was proof that Ireland was "open for business".
Providence chief executive Tony O'Reilly, whose company is already the biggest player around Ireland, was "delighted" at the results. The firm now holds eight licences around the country.
"Our studies to date indicate a number of structures with significant potential which will greatly augment our already formidable acreage position offshore Ireland," he said.
Petrel Resources managing director David Horgan took a similar view, describing his firm's success as "excellent news".
"The high hydrocarbon prices, fast-developing offshore technology and a proven hydrocarbon system means that Ireland's opportunity for offshore exploration has finally come," he claimed.
The licensing system allows companies to prospect for oil and gas in the region, and saves the Government from having to pay for exploration, which has no guarantee of striking oil. The cost of drilling in one licence is estimated at between €80m and €100m.
Despite that, the Government was forced to defend itself against claims that the country would be better off creating a state exploration company and, in effect, nationalising the oil and gas business here.
"The tax take is very significant, and we simply don't have the kind of investment needed," said Mr Rabbitte. "We can't afford to put that kind of money into a hole in the ground."