THE Government has changed rules for exploration companies hunting for oil and gas in Irish waters to encourage new operators to search off the Irish coast.
The rules will open up a much larger area to exploration and give companies two years to decide whether they want to drill once they have started looking for oil.
Previous rules forced explorers to spend large sums of money and limited oil companies to an area around the Porcupine Basin off Kerry and the Rockall Basin off Mayo.
"Basically what we want is more exploration and more drilling," Science Minister Conor Lenihan said after a briefing for oil industry executives yesterday.
"We want to make it less costly and bring in smaller players," he added.
Ireland owns 10 times more land underneath the sea than above the water but many of the sea basins that contain oil and gas are relatively remote from the mainland and up to 3km below the surface.
While Ireland is believed to have 10 billion barrels of oil and gas waiting to be exploited, fewer than one out of 30 wells drilled so far has actually struck oil that can be used commercially.
The latest changes to the system governing licences come days after the Dail passed new legislation to make it easier for oil companies to get planning permission while also tightening up safety rules to ease fears similar to those expressed by the opponents of Shell's operations in Mayo.
Those protests damaged Ireland's reputation and discouraged exploration companies from looking at Ireland, Mr Lenihan said.
Oil companies now have 12 months to apply to the State for permission to explore up to six blocks each. The permission will be granted on the basis of their exploration programmes and their experience.
No money changes hands until oil is extracted from the ground and sold. Mr Lenihan denied the 25pc tax rate that was levied on oil companies was too low, saying oil companies needed incentives to explore when the successful strike rate was so low.
"This round provides for a different kind of authorisation than previously," he added.
"In the past, 15-year licences were issued but they required that a significant investment had to be made within the first two years.
"This round is different in that the offers will be for a two-year period to assess the potential of an area."
The minister also announced a new collaboration between University College Dublin and Memorial University in Newfoundland to map the sea bed between Ireland and Canada. The two countries have close ties historically and share geological features.
WHILE many Irish investors are hopeful that Total will soon join forces with Tullow Oil in Uganda, the French company is pondering the unfolding disaster in the Gulf of Mexico and what it means for the oil industry in the years to come.