Friday 4 March 2011

Gas drilling permits for Lough Allen area given

Two companies have been granted licences to explore an area in Lough Allen, where it is thought there may be large reserves of natural gas.

The Lough Allen Natural Gas Company (Langco) and Australian-based Tamboran Resources have been given onshore petroleum licences to explore the area which takes in parts of Leitrim, Sligo, Roscommon, Cavan and Fermanagh. The area is known to geologists as the northwest carboniferous basin.

The licence will allow the companies to undertake shallow drilling to a depth of 200m (650ft) and carry out technical studies to ascertain whether the gas is commercially viable. If initial studies prove successful, the companies will have first option on a more expensive exploration licence which would be a step closer to extracting gas.

Langco believes there are 9.4 trillion cubic sq ft of gas or the energy equivalent of 1.5 billion barrels of oil in the area. This has a notional value of €94 billion at existing prices and could be considerably more by the time gas could be extracted from the ground.

The company’s managing director, Dr Martin Keeley, cautioned against premature expectations. He said the only thing certain was that there was gas present as successive studies had shown. However, they were a long way off from knowing whether it was worth extracting.

He distinguished between the resource number - which is the amount of gas in the ground - and the reserve number, the amount that is extractable. The two are often widely different.

“Only a small percentage of it might ever be extracted. We are still at too early a stage to get overexcited,” he said. “We will be taking a big risk trying to find out - but we know it’s there, which helps.

"Natural gas has already been found. The issue is one of economics and into that must be factored all necessary precautions to preserve and protect the environment and community,” he added.

Previous attempts were found to have been economically unviable, but the company believes that the rising price of gas and new technology could now make it a potentially viable proposition.

If the initial explorations are successful, the companies intend to return to the Petroleum Affairs Division of the Department of Communications, Energy and Natural Resources and seek an exploration licence. However, this is a process that is at least over two years away.

Dr Keeley said there would be no question of deep drilling a beauty spot. “It would never be considered, nor would it be allowed to - and rightly so.”

Recently, the department also granted London-based oil exploration company Enegi Oil an onshore petroleum licensing option for the Clare Basin, an area which covers all of Clare and part of Kerry and Limerick.

The company believes there is shale gas similar to that found in Newfoundland, Canada. Both areas were joined together hundreds of millions of years ago.

Chief executive Alan Minty said they were investing up to €650,000 in the initial exploration of the area. He said they would apply for exploration licences should the work programme identify prospective targets.

The Irish Times

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