It looks like the Irish government's attempt to revive offshore exploration is working.
Marathon Petroleum Ireland Ltd., the only major that maintained its faith in the region, has been joined by Amoco Ireland Exploration Co. in a joint exploration program in the Celtic Sea south of Ireland.
Having renegotiated its gas price deal with the government, Marathon is to drill seven wells before the end of 1996. Amoco will join in the first three of these, with 25% interests in the first two and as much as 50% in the third.
Thus will begin a new joint exploration and development program off Ireland.
INCENTIVE
Marathon, with interests in 52 blocks in the Celtic Sea, operates the only producing gas fields off Ireland. Kinsale Head field and its satellite, Ballycotton, have a combined flow of 260 MMcfd of gas.
Amoco is the first major to take the bait of a 25% corporation tax on production within certain dates. That compares with a standard 40% rate.
Other companies, including Mobil Oil Ireland Ltd., Chevron Corp., and Enterprise Oil plc, are reported to be awaiting revised licensing terms, expected early next month, before returning.
Marathon's 1988 exploration and production agreement with the government effectively tied up sales of gas to Ireland. That has prevented at least one possible development, in Block 48/18. About 50 bcf of gas is estimated for this reservoir, owned by Bula Oil Ltd. 35%, Santa Fe (Ireland) Ltd. 30%, Oliver Petroleum Ltd. 28%, and Gaelic Oil Ltd.
AFTERLIFE
Kinsale Head will be depleted about the end of the century, while Ballycotton will run out in the mid-1990s. But Kinsale Head's two platforms and pipeline to shore may live on, producing other discoveries in Grid 48.
Marathon has a gas discovery on Block 48/24. BP Exploration Co. Ltd. drilled a discovery on Block 48/18 in 1985 but pulled out in 1989, leaving Atlantic Resources as operator. Atlantic then relinquished the acreage in 1990, at which point Bula moved in swiftly.
Bula, of Dublin, has dug itself into Grid 48, where its acreage is almost surrounded by Marathon. This small company believes its Block 48/17, 48/18, and 48/19 interests could one day make it big. Including BP's discovery, which flowed 13.7 MMcfd, Bula says it might have 2 tcf of gas in the area.
Of course, Bula is a long way from proving that. But it is starting by taking the Ocean Liberator rig, which has been drilling on Block 48/30 for Marathon, to Block 48/19. There it intends to spud well 48/19-2 Aug. 20. Projected depth is 3,440 ft.
Bula believes an earlier well, 48/19-1, clipped a substantial reservoir. We will soon know whether this is gas or Irish mist.
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