Mr Emmet Stagg, the energy minister, said it was "by far our most successful round [of licences] to date," and predicted that Rockall would emerge as "one of the most exciting untested areas in north-west Europe".

One UK oil analyst said the area "could throw up a 1bn barrel find like BP's Colombian venture, but we just don't know."

The companies include BP, Shell, Elf and Total of France, Statoil of Norway, and the US companies Mobil, Arco and Union Texas - taking a total of 58 full and part blocks.

Many of the same companies were involved in the award of licences in April from the UK government, which allocated 41 blocks to 24 companies in its section of the Rockall Trough west of the Hebrides.

Mr Stephen Scullion, analyst with Wood Mackenzie oil consultants in Edinburgh, said it was "one of five or six key exploration areas in the world". He said the next five years' exploration would determine the extent of the hydrocarbon reserves in the British and Irish offshore sector.

Ireland has had a fitful record in its offshore sector. Marathon is producing gas from a field off Kinsale in the south-west which is due to run out in a few years.

There is as yet no oil production, although Mr Stagg revealed that the first oil was due to be pumped from the Connemara field, which is being developed by Statoil.

Enterprise, which drilled two wells in the adjacent Porcupine Basin last year, had been "fairly successful", according to analysts.

Mr Stagg said he had decided that the south Porcupine would be subject to frontier licensing with a closing date of December 15, 1998. The minister said he would make a further announcement later this year about the terms, duration and phases of the licences.

Ireland has one of the world's most attractive tax regimes for oil exploration. Technological improvements have also changed the economics of high risk deep water areas such as Rockall.

Mr Peter de Ruiter, new business development director of Shell UK, said companies were "no longer scared off by depths of over 1,000 metres."

However the industry faces a dilemma in trying to replace reserves - whether to do it through exploration or through acquisition, as happened with Statoil's take-over of Aran Energy, the Irish independent which had interests in BP's West Shetland development.