Fergus Cahill: Failure of Dunquin a sobering reminder of risks and costs in offshore exploration
The announcements last week that the Dunquin North exploration well, some 150km off the Kerry coast, has been plugged and abandoned is a sober reminder of the significant risks and costs involved in oil and gas exploration offshore Ireland. To quote Kevin Biddle, European director of exploration for ExxonMobil, operators of the well, "It is disappointing that the Dunquin prospect has proved to be water bearing, with no commercially recoverable hydrocarbons."
A successful result at Dunquin had the potential to be a game-changer, in the same way as the discovery of the Ekofisk oilfield in 1969 changed the game for Norway.
Dunquin is reported to have a cost approaching €200m. While the information gathered will have a great deal of value for further evaluation, the absence of a commercial discovery probably means that the bulk of this money will be written off. This highlights the extraordinary risks of drilling "wildcat" wells in unproven territory, such as the Porcupine Basin off the Irish coast, and further illustrates the total lack of realism of those who clamour for the immediate introduction of a Norwegian-style fiscal regime.