Rockall’s frontier acreage is just west of Ireland.

The Department of Commun-ications, Energy and Natural Resources is holding a licensing round in the Rockall Basin in 2009. The frontier area will contain previously unlicensed blocks covering 27,413 sq miles (71,000 sq km).

Ireland’s Rockall region lies offshore the west coast and contains a vast amount of virtually unexplored acreage. According to Ciarán Ó hÓbáin, principal officer, Petroleum Affairs Division, “Reservoir potential is expected in continental Permo-Triassic sandstones, marginal marine to fully marine Jurassic sandstones, and submarine fan sandstones in the Lower Cretaceous and Palaeogene.”

Some seismic, mostly 2-D, has been acquired, though not in every block. “Seismic coverage tends to be fair towards the margins of the basin, but
is quite sparse within the basin proper,” Ó hÓbáin said.

Current discoveries near the frontier area include the Dooish gas condensate discovery, which is held under exploration licence by Shell. It lies within the Rockall Basin adjacent to the acreage on offer. The Corrib gas field in the Slyne Basin, which is currently undergoing development, is only about 12 miles (20 km) from the round area.

Stratigraphic control is provided by wells 12/2-1, 1z and 5/22-1 in the Irish Rockall Basin and by wells along the adjacent Slyne-Erris basin trend. Further control is provided by research boreholes, and from exploration drilling along the strike in the UK sector. Gas, gas condensate, and oil phases are all possible within the area on offer. Target depths will generally be in the range of 1.2 to 3.1 miles (2 to 5 km), while water depths vary from 1,641 to 9,843 ft (500 to 3,000 m).

The frontier exploration licences (FELs) are offered through regular licensing rounds in the deepwater Atlantic basins. Detailed terms for the Rockall Round will be announced when the round is formally opened in Q4 2008. They will draw on the specific terms for the most recent round in the Porcupine Basin, which can be viewed at http://www.dcenr.gov.ie.

Fiscal terms for the round were revised in 2007. The revised terms provide that, in addition to the 25% corporation tax already payable on profits from oil and gas production offshore Ireland, a resource rent tax (RRT) would be payable on production from all licences issued after Jan. 1, 2007. RRT will be on a sliding scale from 0 to 15% depending on the ratio of cumulative after-tax profit to cumulative capital investment. The total effective tax rate payable comes between 25% to 40%. There are no royalty payments and there is a 100% write-off of exploration and development costs.

Applications will be required to meet certain minimum exploration obligations. On competitive bids, the key consideration will be the relative strength of the work program. FELS are awarded for a minimum period of 12 years.

An actual date for the close of the round has not yet been set although it is expected to be early in Q2 2009. The invitation to apply will be published in the Official Journal of the European Union and on the department’s Web site.

“Based on the upswing in interest in exploration offshore Ireland the Department is optimistic that the industry will react positively to the opportunity offered by the Rockall Licensing Round,” Ó hÓbáin said.

Recent licensing rounds suggest that applications could be expected from companies already operating offshore Ireland and from new companies wanting to come in. Current players in the Rockall and adjoining basins include ENI, Hess, Island, OMV, Serica, Shell, and Statoil.

The Department has engaged the services of a team of marine environmental consultants, lead by ERT (Scotland) Ltd., to undertake a comprehensive strategic environmental assessment (SEA) of the region. The report of that SEA will be available in advance of the closing date for the licensing round.

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