The majority of firms in the Irish oil and gas industry consider the outlook for the next two years unfavourable after the Government announced plans to phase out oil exploration off the coast of Ireland.

This is part of the Government's commitment to achieve carbon neutrality.

Almost 80% of firms are not confident about the industry's medium-term future, according to the PwC Oil and Gas survey.

Stephen Ruane, Partner with PwC Oil and Gas Practice, said there is still a strong level of interest in continuing to explore in Irish waters.

"There's a strong confidence in the level of Irish geology and the level of reserves which are in Irish waters. There are some groups which are willing to invest hundreds of millions in exploring in Irish waters," he said.

PwC is seeing an increasing trend amongst exploration companies to invest in assets like renewables but they are also diversifying in terms of the territories that they invest in.

"They are looking at other lesser riskier territories, and Ireland has a role to play there in terms of making itself attractive to potential investors," Mr Ruane said.

Two-thirds (66%) reported that climate change is having a major or significant impact on their investment activities and business operations. 

Technology will have a key role in trying to de-risk the industry.

"We have seen that to some extent in the past decade or so, with a transition from 2D seismic to 3D seismic. That has helped exploration companies get a better sense of the geological aspect of what's contained below the surface, and firms have reaped the benefits," Mr Ruane said.

It is fair to say that oil exploration has not been commercially successful in Ireland to date.

There has only been a number of commercial finds in Ireland, the most recent at Corrib in 1996, and prior to that, Kinsale.

Mr Ruane said there have been signs of oil and gas in Ireland but not in sufficient quantities to make them viable.

He said that Ireland needs a significant commercial find. "The problem in Ireland is that only a small number of wells have been drilled. On average we are only drilling one well every two years," he explained.

Over half of firms (57%) who responded to the survey still expect to continue with Irish exploration activities.

The complexity of the planning (20%) and regulatory regime (26%) was reported as the greatest challenge in undertaking activities in oil and gas in Ireland.

69% of respondents rated their experience of the Irish licensing authority as 'poor' or 'very poor'.  "The complexity of the oil and gas regulatory and planning regime is turning off potential investors and damaging our ability to compete internationally," Mr Ruane said.

As we move towards greener, renewable energy, gas is considered a transition fuel. It is cleaner than oil, and it is certainly less carbon intensive, he added.