The Oil and Gas Exploration Regime in Ireland

There are a number of stages before an exploration company reaches the point at which oil and gas extraction or production can be considered.  Various authorisations are issued by the Petroleum Affairs Division (PAD) of the Irish Department for Communications, Energy and Natural Resources under the Petroleum and Other Minerals Development Act, 1960 as amended (the “1960 Act”).  It should be noted that most authorisations are granted in respect of territory in the Irish offshore.  Applications for any authorisation can normally be made by non-Irish incorporated entities.  However where a holder of any authorisation other than a Petroleum Prospecting Licence or a Licensing Option is a foreign company it must have permanent representation in Ireland which is fully authorised to act for such company.  The authorisations which apply to the Irish Offshore are as follows:

1.    Petroleum Prospecting Licence.  This is a non-exclusive licence giving the holder the right to search for petroleum in any part of the Irish Offshore which is not the subject of a Petroleum Exploration Licence, Reserved Area Licence or Petroleum Lease granted to another party.

2.    Licensing Option.  This is a non-exclusive licence giving the holder the first right, exercisable at any time during the period of the Option, to an Exploration Licence over all or part of the area covered by the Option.

3.     Exploration Licence.  There are three categories of Exploration licences: a Standard Exploration Licence for water depths up to 200m; a Deepwater Exploration Licence for water depths exceeding 200m and a Frontier Exploration Licence for areas so specified by the Minister.  For Standard and Deepwater Explorations Licences the holder is obliged to carry out a work programme which must include the drilling of a least one exploration well in the first phase.  For a Frontier Exploration Licence the holder must commit to at least one exploration well in order to proceed to the second phase.

4.     Lease undertaking.  When a discovery is made in a licensed area and the licensee is not in a position to declare the discovery commercial during the period of the licence but expects to be able to do so in the foreseeable future, the licensee may apply for a Lease Undertaking. This is an undertaking by the Minister, subject to certain conditions, to grant a Petroleum Lease at a stated future date. The holder of a Lease Undertaking is required to hold a Petroleum Prospecting Licence.

5.     Petroleum Lease.  When a commercial discovery has been established it is the duty of the authorisation holder to notify the Minister and apply for a Petroleum Lease with a view to its development.  An application is then made to the Minister for a Petroleum Lease pursuant to the Act. The Plan of Development submitted sets out the basis for the project, the reasons behind the selection of the appropriate development option and a comprehensive and technical outline of the project and how it would operate.

In addition to the statutory consents granted by the Minister, the following consents may be relevant to the project as a whole.

Integrated Pollution Prevention and Control Licence

An application is needed for an Integrated Pollution Prevention and Control Licence (IPPC Licence). An IPPC licence is granted by the Environmental Protection Agency (“EPA”).

Planning Permission

Under the Planning and Development Acts, 2000 to 2007 (as amended), it is normally necessary to apply for planning permission.  It is possible that the application will need to be accompanied by an Environment Impact Statement.

Foreshore Licence– Department of Agriculture, Fisheries and Food 

An application accompanied by an Environmental Impact Statement is sometimes necessary to be made to the Minister for Agriculture for a Foreshore Licence.

For further information contact Stephen Walker, Therese Rochford, Brendan Ringrose or your usual Whitney Moore contact.