A PricewaterhouseCoopers (PwC) survey of companies involved in the Irish oil and gas industry and sectoral economists has predicted that just €300 million will be invested in the industry in this State in the next two years.

This compares to a corresponding estimate of €1 billion when the survey was last taken a year ago, illustrating the levels of gloom prevalent within the sector in Ireland.

The survey, which is to be presented at the Atlantic Ireland industry conference that kicks off today at the DoubleTree by Hilton hotel in Dublin, found that barely more than a quarter of those surveyed rated the outlook for the next two years as favourable.

More than half of respondents cited the negative impact of the protests that greeted Shell’s attempts to develop the Corrib gas field as problematic for the industry, such as when Irish-based companies seek partners abroad.

The new fiscal regime for exploration outlined by the Government last year came in for strong criticism.

Fewer than a quarter of respondents believed the terms were appropriate given the stage of the industry’s development.

Cost of drilling

More than half of those surveyed took part in the State’s last licensing round. The south and north Porcupine Basins, off Ireland’s southwestern Atlantic coast,were the most popular areas targeted by investors in that round.

The Donegal Basin and the Hatton Basin, also off the west coast but further north, were the least popular locations.

A third of respondents cited the high cost of drilling in Ireland as a barrier to development in the industry here.

The planning regime for infrastructural development, however, came in for particularly strong criticism.

"It was noted that this was an area requiring significant overhaul to make it more efficient and streamlined," said PwC. "Investors view it as a significant additional risk factor whereby developments could be delayed for a long time similar to Corrib."

Ronan MacNioclais, a partner in PwC’s oil and gas practice, said the fall in crude prices has had a “dramatic” impact on the industry here.

“At times of low oil and gas prices, investors will invest in high-return low-risk locations, which unfortunately we are not,” he said.

“We would expect the Irish oil and gas industry to experience continued challenges as the price of oil and gas remains low.”