Commenting on the survey results, Ronan MacNioclais, PwC oil and gas practice partner, said:

“The significant and sustained fall in the price of oil and gas in recent years has had a dramatic impact on the Irish oil and gas industry. As noted in prior years, Ireland is viewed internationally as a high risk location for investment in oil and gas exploration due to the lack of historic commercial discoveries.

“At times of low oil and gas prices, investors will invest in high return low risk locations, which unfortunately we are not. However the recent stabilisation in oil prices has clearly lead to an increase in confidence among industry players. The Irish oil and gas industry may become more attractive for investment as the price of oil and gas is expected to increase.”

Based on the survey, the aggregate estimated spend on exploration activities over the next two years is expected to be in the region of €502m.

This represents an increase from the equivalent figure of €300 million in 2016, and is an encouraging indicator about the long-term prospects of the industry in Ireland given the cost of exploring here.

Key findings in the survey include:

• The main hurdles to the development of the industry in Ireland, as noted by exploration and production companies, were a lack of commercial discoveries (59%), the negative impact of the developments at Corrib (41%), more attractive investment opportunities elsewhere (44%) and the regulatory regime (37%). There are significant linkages between commercial discoveries and costs and opportunities elsewhere, as investors will choose locations with proven track records and lower cost bases.
• While the continued successful operation of the Corrib field is a good news story during the year, it is clear that the difficulties experienced during its development continue to cast a shadow over Ireland’s reputation internationally. While it would be hoped that the emphasis placed on the Corrib factor will decrease as the benefits are seen, it is clear that the damage done to Ireland’s reputation remains. On a positive note, the recent agreement by CPPIB to purchase Shell’s interest in the Corrib field could indicate that international sentiment towards Corrib has improved, though this is not yet reflected in the survey results.
• A large majority (89%) of respondents are optimistic about the level of petroleum yet to be discovered in Ireland this year and is similar to last year (83%).
• The vast majority (91%) of respondents felt that the oil prices would remain at current levels or increase in the next two years.  A large majority felt that prices in excess of $50 per barrel is necessary to support a progressive and sustainable industry. Prices are currently in the range of $50-$55 per barrel, so even a small decline on current prices could hamper the development of the industry. The key drivers of oil and gas prices in the coming years were noted as agreements at OPEC and other international bodies, and levels of international shale petroleum production.
• Other projects competing for investment and access to funding were identified as the largest challenges faced in carrying on oil and gas activities in Ireland. These factors are linked, as investors will be more willing to fund activities in locations with better prospects of success.
• For future licensing rounds, the South and North Porcupine Basin were the most popular choice of location with 52% of respondents expressing an interest in each.  The basin attracting the second highest vote was the North Celtic Sea at 36%.  The Hatton and Donegal Basins remain the least popular with no respondents considering them for future licensing rounds.
• Participants were asked what the Government could do to help the industry. It was clear that maintaining, if not enhancing, the fiscal terms was seen as the most important measure. The planning and regulatory regime also came in for particular criticism and it was noted that this was an area requiring significant overhaul to make it more efficient and streamlined.  The need to promote the benefits of a successful industry was also highlighted.
  MacNioclais said: “In times of economic uncertainty, it is crucial that the Government takes positive steps to encourage investment into the Irish oil and gas industry. It is clear that steps need to be taken to improve the regulatory and planning processes to fast-track developments, as these are causing companies difficulties and impacting on Ireland’s reputation internationally.”
• 53% of participating economists felt that current petroleum prices represent an opportunity for the industry in Ireland to some degree. These opportunities may arise from the potential cost savings available on exploration, although Ireland remains a relatively expensive location in which to carry on exploration activities. This result is a decrease on the prior year figure of 66%.