In December, the Manx gov extended a licence allowing Crogga Ltd to complete seismic surveys off the east coast of the island.
That four month extension has given the company more time, but we thought before we know where we’re going, it would be worth looking back into the history of gas exploration in Manx waters.
From the 1970s to the present day, we look at abandoned plans, relinquished licences and the size of territorial waters. For the sake of ease, the site we are talking about is Block 112/25, a name which will reappear throughout.
1970’s and 80s
Weirdly this deep dive doesn’t begin in Manx waters, but goes back to the 70s and 80s when the area in question actually belonged to the UK. Some exploratory work was done to explore the seabed for reserves, but these were later abandoned.
Cluff Oil drilled an area to the east of the island in 1976 and this structure, the Carboniferous, lies at the sea bed. Gas shows and traces of dead oil were encountered, indicating that oil and gas have been generated and leaked from the top of the structure in the past.
There has been one gas discovery made in 1982 by BP Petroleum Development Limited, in the same area which Crogga is now looking to exploit. However, it was in UK waters at the time, so the island wouldn’t have benefited commercially from it anyway.
BP later plugged and abandoned the well. That licence expired in 1985 and the company relinquished the area.
After negotiations with the UK gov, the Isle of Man acquired the rights to territorial waters up to 12 miles from the island’s coast. This included all hydrocarbon, coal and mineral rights.
This is a key moment as it means that the Crogga site moved from being in the UK to Manx waters.
BP applied for Block 112/19 off the Point of Ayre, as part of the first Isle of Man offshore licencing round. The block was awarded to another comapny who subsequently drilled a dry hole in the Solway Basin along with two other dry holes in the Peel basin. BP also applied for and was awarded an Out of Round licence for block 112/25 and the adjacent sections of blocks 112/30, 113/16 and 113/21.
BP completed its studies of the area and decided against drilling an appraisal well.
BP relinquished the licence
In a 1997 presentation to the Isle of Man Government, BP stated that the discovery and prospects were summarised as: ‘Not economically attractive’, ‘discovered volume small’, ‘risk on reservoir delivery high’ and ‘cost of standalone development too high’.
Everything went quite quiet for some time but it is at this time that Crogga said members of its management team were involved in surveying and desktop work relating to Block 112/25.
The gov announces that it has awarded Crogga a licence following a bidding process held between September and December 2017.
At the time, the gov said: ‘Two bids were received and both underwent a technical assessment and evaluation by the Department of Infrastructure, the Department of Environment, Food and Agriculture, and the Department for Enterprise with the assistance of legal and technical advisers, including the British Geological Survey.
‘The initial seismic surveys will be subject to approval by the DEFA and will require consultation with other stakeholders. Any progression to future stages, such as exploratory drilling, would require further consent and approvals. It would be based on the findings of the seismic data collected and would require the licensee to demonstrate further financial and technical capability. Appropriate environmental information would also be sought at this stage in order to inform any decision.’
Isle of Man declares a climate emergency.
Crogga then began seismic surveying of Block 112/25, followed by technical reviews and processing of sub-surface seismic data.
The Climate Change Bill is also making its way through Tynwald at the time.
During the General Election campaign, it is claimed that up to £800bn of gas deposits exist in Manx waters.
The Climate Change Bill receives royal assent and is now law.
With the licence due to expire on December 31, the DoI announced it would extend Crogga’s licence for four months, the company had asked for 18.
The extension is to allow Crogga to complete the seismic survey and acquire other geophysical data.
A gov spokesman said the extension would ‘enable the DoI to take into consideration the Isle of Man Government’s wider policy on offshore energy production as part of the decision on the longer licence extension request’.
DoI Ministyer Tim Crookall said he was ‘ pleased the company has agreed to this arrangement and look forward to working with them over the coming months’ and that would allow Crogga and the dept to complete more work on the issue.
Crogga Limited chief executive officer Diccen Sargent added: ‘We look forward to providing the government and the public with the factual information and details of our business plan, so they can be reassured about the environmental, financial and energy benefits, which we believe will transform the future of our island.’
We don’t know what happens next, the DoI’s extension expires at the end of April, so we will likely hear something before then.
With the island committed to net zero emissions by 2050, opposition amongst politicians and the public and fears that the taxpayer would be left with a white elephant to clear up, it is easily feasible that this is where the story ends and there will be no further gas exploration.
However, with the recent soaring price of gas and some saying that as we will still be using gas for some time, it makes sense to them that we use the gas available in Manx waters as opposed to relying on imports. Coupled with this, if there is even 10% of the claimed £800bn worth of deposits, it would take a brave Tynwald to block drilling given the potential benefits to the Treasury, which could in turn fund some major capital projects for years to come.
We don’t have long to wait until we get a clearer idea of how the gov views gas exploration, but somehow we doubt that April will be the end of this no matter what decision is made before then.