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Ireland’s Oil and Gas Reserves

“We declare the right of the Irish people to the ownership of Ireland...”

1916 Proclamation of the Irish Republic

How Much Oil And Gas Is There?

For decades Ireland was believed to have little or no viable oil or gas reserves.  It was only with the development of more advanced methods of exploration that it became apparent that Ireland does indeed have substantial oil and gas reserves, both offshore and onshore.

Before examining how much Irish and oil and gas there is it is important to understand some of the basic terminology used in relation to hydrocarbons and how the value of reserves are determined.

‘Conventional’ and ‘Unconventional’ Oil:
Oil it is often divided into ‘conventional’ and ‘unconventional’ categories.  Conventional oil is of a type that can be easily extracted from the earth and requires relatively little processing before it can be used.  World supplies of conventional oil are predicted to last somewhere between forty and one hundred years, dependent on the rate of use and the discovery of new oil fields.  ‘Unconventional’ oil is of a type extracted from sources such as tar sands, heavy oil and oil shale and is more difficult, expensive and environmentally damaging to produce then ‘conventional’ oil.  Irish oil is of the ‘conventional’ type.

‘Viable’ reserves:
The word ‘viable’ is often used in reference to oil or gas fields.  Exactly what is considered economically ‘viable’ in the Irish context is decided by the energy companies.  Viability is determined not simply by whether a profit can be made but by whether enough profit can be made to satisfy the expectations of the shareholders of the energy companies.  By weighing the market price of oil or gas against the cost of extraction ‘viability’ can be established.  Therefore an oil or gas field which may be ‘unviable’ when oil prices are relatively low can become very ‘viable’ when prices rise.  Major advances in deep-sea exploration technology have reduced the costs of such extractions and further increased the ‘viability’ of Irish oil and gas reserves.

The energy companies that are currently active in Ireland rank among the worlds largest and do not generally become involved in minor or ‘marginal’ fields.  Shell, the primary developers of the Corrib gas field generated profits of almost twenty-three billion dollars in 2006.  Exxon, the primary developers of the Dunquin field, profits for 2006 were in excess of forty billion dollars.

Measuring the size of an oil or gas field:
Oil fields are generally measured by the estimated numbers of barrels of oil they contain while gas fields are generally measured in either estimated cubic feet or metres.

Measuring the value of an oil or gas field:
It is impossible to determine what the exact future monetary value of a particular oil or gas field might be.  This is because the actual size of an oil or gas field may differ from the estimated size and the price of oil and gas is constantly fluctuating.  It is possible, however, to calculate the total value of a reserve based on the estimated size of the reserve multiplied by a fixed price per barrel of oil or cubic foot of gas.

Ireland’s Oil and Gas

Irish territorial waters cover an area roughly 10 times the size of the island of Ireland extending to a distance of 200 nautical miles off the coast line.  This represents a vast area of seabed, much of which has not yet been explored for oil or gas.

Within this territory there is an underwater known as the ‘Atlantic margin’.  It runs parallel to the island of Ireland from Kerry to Derry and then continues across by the North of Scotland and onwards to Scandinavia.  Massive oil and gas reserves have been already been discovered and extracted along the North Sea section of the Atlantic margin, generating huge wealth for the economies of both Britain and Norway.

Many geologists believe that there are also substantial reserves of oil and gas to be found along the Irish section of the Atlantic margin.  Advances in deep sea exploration technology over the last decade are now allowing those reserves to be discovered and extracted.

Listed below are some of the larger known reserves of Irish oil and gas.  They are listed in the order of estimated size:

"Even if we're half-right, the numbers are mind-blowing”
 ~ Tony O’Reilly Junior, CEO Providence

Dunquin
Estimated Size of Reserve:  4,130 MMBO* (Billion barrels of oil) and 25.5 TCF* (Trillion Cubic Feet of gas)
Potential Value:  Total = €3,977billion** (Oil = €1,958billion**.  Gas = €2,019billion**)
Location: Porcupine Basin 200km south-west of the coast of Co Kerry
Status:  Seismic mapping and testing of seabed gravity cores indicates two substantial reserves – Dunquin North and Dunquin South.  Further testing and drilling scheduled to take place in 2007.
Owned By: Providence (16%) ExxonMobil: (80%), Sosina: (4%)
*Figures supplied by Providence,
**Calculated on estimated reserve.  Oil @ $60 per barrel of oil.  1 TCF of Gas equal to 167 MMBO.  Exchange rate of $1 to €0.79

Corrib
Estimated Size of Reserve:  Corrib and associated fields estimated in 1998 to contain between 6 and 11 TCF.  Shell later revised this figure dramatically downwards to 1TCF.
Potential Value:  Between €7.916billion* and €87.074billion*
Location:  Slyne/Erris Basin, 80km off the coast of Mayo.
Status:  Commercial ‘viability’ established.  Shell attempting to construct onshore refinery in Ballinaboy, Co Mayo and lay high pressure pipeline from Corrib reserve to refinery.
Owned By:  Shell (45%), Statoil (36.5%) and Marathon (18.5%)
*Calculated on estimated reserve.  1 TCF of Gas equal to 167MMBO.   Oil @ $60 per barrel of oil.   Exchange rate of $1 to €0.79

Spanish Point
Estimated Size of Reserve:  206MMBO* and 1.25 TCF*
Potential Value:  Total = €19.659billion**.  (Oil = €9.764billion**.  Gas = €9.895billion**)
Location:  Porcupine Basin, 200km off the coast of Co Clare
Status:  First discovered in 1981 but judged to be financially non-viable at that time.  Providence currently re-examining data with a view to opening the reserve.
Owned By:  Providence (80%) Partner: Sosina (20%)  
*Figures supplied by Providence
**Calculated on estimated reserves.  1 TCF of Gas equal to 167MMBO.  Oil @ $60 per barrel of oil.   Exchange rate of $1 to €0.79

Kinsale Head/Ballycotton/Southwest Kinsale/Seven Heads
Estimated Size of Reserves:  1.5TCF
Potential value:  Reserves largely depleted
Location:  50km off the coast of Co Cork.
Satus:  ‘First’ gas from Kinsale Head gas field in 1978.  Ballycotton ‘first’ gas in 1991.  Southwest Kinsale first gas in 1999.  Seven heads ‘first gas’ in 2003.  Reserves now largely depleted.  Expected to finish production by 2015.
Owned By: Marathon

Lough Allen Basin
Estimated Size of Reserve:  9.4TCF*
Potential Value:  €74.410billion**
Location:  Beneath Lough Allen and straddling counties Cavan, Fermanagh, Leitrim, Roscommon and Sligo.
Status:  Gas first discovered in the 1940’s.  Commercial viability currently being assessed.
Owned By:  Finavera
*Figures supplied by Finavera
**Calculated on estimated reserves.  1 TCF of Gas equal to 167MMBO.  Oil @ $60 per barrel of oil.   Exchange rate of $1 to €0.79

"The Lough Allen natural gas field has the potential to change the energy dynamic of Ireland and the UK,"
 ~ Tom Davitt, CEO, Finavera