3D survey vital for future dash for gas

Tynwald buildings, Douglas

Tynwald buildings, Douglas

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A 3D seismic survey of potential gas deposits in Manx waters off Maughold Head would cost £5 million pounds to carry out.

But the Manx government is seeking to grant exclusive rights to a specialist contractor to carry out the survey at no cost to the taxpayer.

Economic Development Minister John Shimmin told the House of Keys that the survey firm would then recover its costs by selling the seismic data to companies seeking a prospecting licence.

Replying to a series of question by Michael MHK Alfred Cannan, the Minister said: ‘We now need to commission the seismic survey which will give us much more insight into the potential value of hydrocarbons within our waters.’

He said his department had consulted with a number of island residents with substantial experience in the industry who had agreed a good-quality 3D seismic survey report, replacing 2D surveys carried out in the 1990s, was ‘vital if we are to progress to extraction’.

Mr Shimmin said block 112/25 to be surveyed was an ovoid shaped area (shaped like an egg) buffering the island’s 12 mile limit off Maughold Head. Technical studies carried out by BP Exploration indicated a possible discovery of a significant volume of gas there. With increases in gas prices and advances in drilling techniques, the gas deposits may now be economically viable to extract, he said. He told MHKs the study would be undertaken for a nominal sum of £1 to government and it will be for the contractor to recover its costs through the subsequent sale of the 3D data to companies participating in any hydrocarbon licensing round next year.

But his department was proposing an option within the agreement to purchase the survey data should it be considered beneficial to own the commercial rights.

‘A seismic survey in this block and surrounding area would cost several million – estimated at about £5 million. We do not believe it would be a good use of government resources to invest in the survey, as the cost might generate no benefit if the results reveal further development is not viable,’ he said.

Mr Cannan questioned whether following the UK model of going straight into the licensing round was the right way forward. He suggested there should be a full debate before any decisions were taken.

Mr Shimmin pointed out that Mr Cannan is on the committee looking into this matter and said his questions were ‘premature’. ‘Unless we get the 3D seismic results we have no data and information which anybody can utilise,’ he said.

He said there were alternatives models and there were ‘serious doubts’ at the way the UK has exploited its gas reserves. ‘Therefore we are looking at a Norwegian model which is more about sustainability,’ he told MHKs. He said it was intended to tender later this year for an independent consultant to assist with the hydrocarbon licensing round.

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