By Walter Bruton and David Ruddock
There is a real sense of interest and momentum developing around exploration opportunities in the Irish Offshore. This was evident at the 4th Annual Atlantic Ireland Conference in Dublin towards the end of 2013, at which many major IOCs and representatives from the Oil &Gas supply chain and adjacent industries were present (there was a 25% increase in delegate numbers over the previous year).
Whilst speaking with exploration and new venture representatives from IOCs and independent operators, as well as with regulators and service companies at the conference, ERM learnt that most were interested in hearing about the status of the seismic acquisition programme being carried out on the Atlantic margin and progress towards the new regulatory regime which is being put in place by Ireland’s Petroleum Safety Framework (PSF).
When it comes into force in the near future, the PSF will require the Commission for Energy Regulation (CER) to establish and implement a goal setting, risk-based framework for designated petroleum activities. This is in line with trends towards a Safety Case structure in other parts of the world and meets the requirements of the EU’s Offshore Safety Case Directive in Irish waters.
The new regime will require operators to reduce risks to a level that is as low as is reasonably practicable (ALARP). Operators must prepare a formal Safety Case for all offshore oil and gas operations. ERM’s Dublin office and ERM Risk Management are currently supporting clients with the preparation of both well and non-production Safety Cases, which we believe will be the first to be submitted for determination.
Exploration, development and production from offshore Ireland has been sporadic over the last 40 years, resulting in only four producing fields. However, the last (2011) licensing round resulted in the award of 13 new licensing options, 3 of which have since been converted to Frontier Exploration Licenses that carry an obligation to drill or drop. Applications have also been lodged with the Petroleum Affairs Division to convert nine of the remaining licensing options.
The next round, to be launched in Spring 2014, is expected to draw the attention of more major international operators. The Irish Government is eager to attract additional investment by creating an attractive fiscal regime, developing a robust and clear regulatory context and acquiring a huge amount (18,000km) of new seismic data to fill in data gaps that may have previously deterred operators. The indication is that 10,000 km of the new data will be available by mid-2014, with the remainder expected by early 2015.
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Walter Bruton is a senior consultant based in ERM’s Dublin office. David Ruddock is an ERM Business Development Manager with special responsibility for the oil and gas sector.