Madam, – Fionntán Ó Suilleabháin (December 14th) states that the law governing Irish gas and oil exploration was changed “for reasons still unknown” in 1987 and 1992.
In fact, the reasons are not unknown – and are far more straightforward than Shell to Sea or correspondents like Mr Ó Suilleabháin would have people believe. The licensing terms for gas and oil exploration have evolved constantly since exploration commenced onshore in 1959 (not just in 1987 and 1992 as Mr Ó Suilleabháin implies) and during the “oil shocks” of the 1970s Irish licences modelled on Norwegian terms were taken up, as Western countries were spurred into finding indigenous supplies of oil and gas. However, following the discovery of the Kinsale gas field in 1971, the subsequent efforts at exploration off Ireland’s coast during the 1970s and 1980s can be considered a near total failure.
As the price of oil and gas dropped throughout the 1980s, Irish exploration licences became unattractive to the oil and gas exploration companies.
Indeed, the uptake of licences in the “Third Licensing Round” of 1984 was notably poor – denying the State much needed revenue at that time. It was only with the decision to abolish the State participation and royalty components of the licences, that Irish exploration licences became attractive by international standards again.
What Mr Ó Suilleabháin calls “bizarre” was, in fact, quite pragmatic on the basis that oil and gas are found only by drilling wells, and that exploration should be facilitated and encouraged by every means possible.
The so-called “frontier licensing rounds”, begun in 1994, were subsequently well subscribed and it was under these licences that the Corrib gas field was discovered, in 1996.
Mr Ó Suilleabháin, Ms Harrington and their ilk may believe the State can now renegotiate Shell’s licences, but that is a nonsense. It is the moral equivalent of a casino demanding a share of a gambler’s winnings after selling him the high stakes wager in the first place. Is there a clamour to refund the estimated €3 billion invested in failed wells since the early 1970s? Of course not. Does it just suits certain people’s world view to believe that Ray Burke knew in 1987 that an extensive gas field would be found some nine years later? – Yours, etc,