Ireland offers oil discovery, frontier blocks for bidding

Ireland's newly named Department of Marine and Natural Resources has offered Seven Heads oil discovery and frontier acreage in the South Porcupine basin for bidding by petroleum companies.

Seven Heads is a small accumulation of oil and some gas, discovered by Esso Ireland Ltd. in 1974 and subsequently relinquished. A department official said no reserves estimate figure has been published.

Now companies have until Apr. 8, 1998, to submit applications for a lease undertaking covering four half-blocks containing Seven Heads: 48/23 South, 48/24 South, 48/28 North and 48/29 North (see map).

The lease undertaking will be valid for 3 years from June 1998 and will require the leaseholder to establish estimated reserves and likely production profiles and provide a development plan if the find is commercial.

The department says Seven Heads lies in 100 m of water, 50 km from shore and 20 km southwest of Kinsale Head gas field. The four half-blocks on offer cover 520 sq km.

Seven Heads history

Four wells have been drilled in the field. Three produced hydrocarbons, and the fourth, while not tested, "had shows, and hydrocarbon saturation was evident."

Mary O'Rourke, minister for marine and natural resources, said, "Announcing the lease undertaking at this time will enable new seismic data to be acquired this year, which will provide an improved technical basis for companies to prepare their applications."

The minister noted that a contractor has begun acquisition of high-resolution 2D seismic over Seven Heads area, which will be made available on a non-exclusive basis.

The official said the Seven Heads offering was not a result of the disappointing appraisal of Connemara prospect, which government had hoped would become Ireland's first oil field development (OGJ, Sept. 1, 1997, p. 36).

"The offering of Seven Heads has been on the cards for a while," said the official. "We've had a number of inquiries from oil companies."

Frontier round

O'Rourke also announced that 156 blocks in the South Porcupine basin off western Ireland, covering more than 40,000 sq km, are open to bids from oil companies.

The deadline for bid submissions is Dec. 15, 1998.

The department official said only one well has been drilled in the South Porcupine basin so far, and that was a dry hole. Water depth in the region ranges from 200 m in the east to more than 2,500 m in the southwest.

O'Rourke said the limited understanding of hydrocarbon potential in the area is being addressed, with several seismic contractors having acquired or now acquiring data ahead of the round.

Because of the frontier nature of the acreage, the department says licenses will run for 15 years beginning Mar. 15, 1999, compared with 12 years for deep water and 6 years for standard acreage.

License holders will be required to acquire seismic data during the first 3 years, after which some or all of the license area must be relinquished unless drilling of at least one well is slated.

"A company that makes a discovery under a license granted in this round," said O'Rourke, "in accordance with the Finance Act of 1992 will have until May 31, 2013, to apply for and be granted a petroleum lease, enabling it to develop any discovery and qualify for the special 25% rate of corporation tax on profits."

Department of Marine and Natural Resources is the new name for the short-lived Department of Public Enterprise, which replaced the former Department of Transport, Energy and Communications after Ireland's recent general election.