A Donegal company bidding for an oil and gas exploration licence off the west coast has said it will donate 10 per cent of its profits for educational and other uses.
Grianan Energy Ltd is to make an application to Donegal County Council today for the construction of a 350mw gas-fired power plant in Burtonport. The company is proposing that if gas is found off the coast it will be used to create electricity in the Burtonport plant.
The bid from Grianan Energy is the only bid from an Irish-owned company received by the Department of Communications, Marine and Natural Resources for frontier exploration licences in the Frontier Sylne/Eris/ Donegal licensing round.
The other applicants are Statoil/ Shell, Serica Energy (UK), and Island Oil & Gas plc.
Derek McLoughlin, a director of Grianan, said he and his fellow investors had spent more than €2 million on seismic analysis and other work connected to their application for the licence.
"We are one hundred per cent Irish-owned and we are the first such company to bid for the right to drill for gas," he said. "We're not fronting for anybody."
He said the company had €120 million in funding available, with banks and venture capital firms willing to become involved. He said there was "an abundance of people trying to invest in energy"
He and a number of the other directors have a background in property and construction but developed an interest in creating an Irish firm to exploit Ireland's natural resources, he added.
Finance director Mark Turner said the seismic analysis conducted for Grianan has indicated the field is similar to the Corrib field, where gas has been found. "We're pretty confident gas can be found," he said.
Mr Turner is a native of Donegal who for many years was involved in organising funding for energy projects in Latin America and elsewhere. He said when he returned to Ireland he was contacted by the Grianan investors and convinced to become involved.
He said contact had been made with international operators who could be contracted to drill for gas if the licence was granted to Grianan. He said drilling can only occur for three months every year, at a cost of approximately €200,000 per day. Grianan has enough capital lined up to drill "for several years, no problem".
The application from Grianan is "very focused on Donegal and has a patriotic tinge," he added. The company proposes setting up a trust that would receive 10 per cent of gross revenue, or pre-tax profits.
The money would be used to fund a number of activities including local educational programmes associated with the energy sector.
He said even a smallish field could produce in excess of €700 million annually, meaning the amount produced for the trust would be very large compared, for example, with the annual budget of Donegal County Council.
The discovery of gas off the coast of Donegal should provide a boost to the local economy and not just be piped off to heat homes in Dublin, he added.
The closing date for applications for the licences was March 15th and they are currently being reviewed by the department.
