For "very hopeful", read "euphoric", say Mr Egil Endresen's executives as they await the arrival of the Sovereign Explorer rig from west Africa. Mr Endresen, Statoil's company's general manager in Ireland, stresses that the "drill bit" is the ultimate test, but conditions look good for the Sarsfield prospect 120 nautical miles west of the Kerry coast.

That said, similarly optimistic noises were being made in relation to Enterprise Energy Ireland's prospect in the Rockall Basin 100 miles north-west of Donegal only a few weeks ago.ago the company announced that it was plugging the well, having reached its target drilling depth of 4,120 metres, starting in 1,623 metres of water. It reported that the "well" was dry.

The surprise announcement was made by Enterprise just a fortnight after it had flown the Minister for the Marine and Natural Resources, Mr Fahey, and television crews out to the West Navion drillship. Interviewed on that trip, the Minister indicated that he would review the fiscal terms set in 1992 for exploration in Irish waters by oil and gas companies if there was a successful outcome to this year's oil drilling programme (see story on left).

The Statoil drilling programme on the Sarsfield prospect is in more shallow conditions - some 650 metres of water - and is due to begin this month. It is expected to last about eight weeks. The three-dimensional seismic data looks very promising, according to exploration manager, Mr John Conroy, and the company expects that the £10 million (€12.7 million) committed so far will prove to be a good investment - well worth the £25 million it expects to spend by the time it has taken full advantage of its licence.

Then it has been known to get excited before. Statoil acquired Aran Energy, the Irish exploration company, two years after being awarded its first exploration licences here in 1994. It was certain that the Connemara field could become commercial. Subsequent tests reported that there was not sufficient oil to make it worthwhile, after some £150 million had been spent.

The company is very anxious to emphasise the spin-off for the Irish economy this time round - specifically, one Irish port - Fenit in Co Kerry. Eight miles from Tralee, it is the nearest landing point to the prospect and will service the Sovereign Explorer. Mr Endresen describes Fenit as an "ideal" onshore base, with a well-developed harbour and little congestion. He praises the Fenit Harbour Commissioners for their "very professional" approach to negotiations with the company.

For Mr Endresen and his executives, the decision to drill is highly significant. "No other well has been drilled on the Porcupine since 1997, so we are trying to kick start that again," he said. The company estimates a "one-in-five to one-in-ten" chance of success. This compares to odds of one-intwo off West Africa, and one-in-three in the Gulf of Mexico.

Technology has improved since the Connemara discovery, and even since Statoil's involvement. It is technology that has made the Corrib North gas field viable. Statoil holds a 36.5 per cent stake in Corrib, which is being developed by Enterprise Energy Ireland. At the same time, Mr Endresen insists that the fiscal regime in Ireland is not unduly kind to exploration companies, given the conditions offshore and the likelihood of success.

Mr Endresen's own government took a highly responsible attitude to the discovery of resources in its own waters some three decades ago. Mr Endresen, who is from Stavanger, remembers how many of the early employees on exploration rigs offshore were from Louisiana and Texas. And the resource could very easily have fallen into other hands. In 1962, natural gas had been discovered in Holland and the Phillips Petroleum Company of Oklahoma wrote to the Norwegian authorities seeking exclusive rights to the entire Norwegian continental shelf - then unexplored, geologically, and potentially an extension of the Dutch find.

By the time Norway was prepared to award production licences, a number of the world's major oil companies were interested. In late 1969, just when Phillips had about had enough, it struck oil in an area called Ekofisk, and the North Sea "came alive". Mr Endresen insists that the North Sea's providence had already been established by the time Statoil was established in 1972. In tandem with this, the Norwegian government encouraged large numbers of crew who were being squeezed by a shake-up in the shipping industry into offshore jobs. This "Norwegianisation" ensured that expertise was acquired and retained within the host state.

"Yes, the tax conditions are the best in the world," he says. "But offshore Ireland is not west Africa, where every major international company is involved." He believes the Irish government is acting "very responsibly" and is not letting exploration companies away lightly - though he is hardly likely to admit it if it were.