Page 4 - EurOil Week 27 2019

EurOil COMMENTARY EurOil
Ireland kills off bill blocking drilling
The government has cited the costs Ireland would incur from imposing the legislation
IRELAND
WHAT:
The Irish government has prevented a bill that would have put a stop to offshore exploration.
WHY:
Dublin warned that there could be legal challenges to the bill.
WHAT NEXT:
Ireland needs new gas discoveries to replace its declining production at its decades-old projects.
IRELAND’S oil and gas industry has breathed a sigh of relief following the government’s block- ing of a bill that would have banned the issue of new o shore permits.
e Climate Emergency Bill, rst proposed by People Before Pro t (PBP) MP Brid Smith two years ago, won backing from environmen- talists as a means of reducing Ireland’s car- bon footprint. But critics argued that far from achieving this goal, the ban would make Ireland increasingly dependent on fossil fuel imports and put an end to its economic recovery.
After some delay, the bill was passed by majority vote twice in the Dail, Ireland’s lower house of parliament. But last week the cabinet of Irish PM Leo Varadkar prevented the bill from being passed into law, citing the losses the state would incur from obligations to existing holders of o shore drilling permits, as well as from legal payouts if these operators challenged the legisla- tion in court. It also pointed to the loss of future tax revenues from gas production as a factor behind its decision.
Dublin also argued that instead of reducing Ireland’s carbon emissions, the bill’s introduction would simply leave the country more reliant on gas imports. Ireland currently gets around 60% of its gas from the Corrib gas eld o the coast of Mayo and several smaller deposits, with the rest of its needs met by supplies from overseas. But Ireland will need to advance new projects if it wants to o set production decline at Corrib, which is due to reach depletion by 2030.
Warm reception
e decision to block the climate bill has been welcomed by the country’s oil and gas lobby.
“[ e] government has recognised that using our own natural resources is not only good for energy security but also good for the environ- ment and jobs,” Mandy Johnston, CEO of the Irish O shore Operators’ Association (IOOA), responded in a statement. “ e facts speak for themselves: Russian gas imported to Ireland cre- ates 34-38% more greenhouse gas [GHG] emis- sions than using Irish gas, while LNG imported from Qatar creates 22-30% more.”
By allowing exploration to continue, the asso- ciation said, authorities would pave the way for new discoveries similar in size to Corrib.
Shares in London-listed Europa Oil & Gas, one of the companies at the forefront of o shore exploration in Ireland, surged 24% on the a er- noon of June 5, when the government’s deci- sion was announced. e company operates six licences in Ireland’s Atlantic zone, with six of its prospects now at drill-ready status. It is also in talks to farm out stakes in three of its licences with a major international oil company (IOC).
Other companies that would have been affected by the ban include Providence Resources, which had threatened the govern- ment with legal action prior to its decision. e company plans to embark on a $200mn ve-well drilling programme by the end of this year at its agship Barryroe eld o the coast of Cork. It is also seeking development partners for the
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w w w . N E W S B A S E . c o m Week 27 11•July•2019