The giant oil exploration company Marathon Oil will re-start drilling for gas in the Irish Sea this year.

Company spokesman, Sheena Wallis, said that the project had been re-evaluated and it was the company's intention to drill another exploratory well at the Dragon field later this year.

"We do not have an exact time yet," she said. "We have been in discussion with the authorities and these are continuing, to obtain the required permits. "We are also still discussing where we will be based."

The company sank exploratory wells in the Irish Sea in 1994. But because of falling oil prices worldwide, the company held back on further drilling.

Milford Haven Port Authority general manager, Ted Sangster, said: "We have been speaking with Marathon and we understand they will be undertaking more drilling this year to prove that there is exploitable gas there. If there is, then they will speak to us again in due course about bringing it ashore."

The port authority has also begun discussions with RWE npower, which has submitted an application to the Department of Trade and Industry to build a power plant on the former Pembroke Power Station site at West Pennar.

"They have started speaking to us with a view to getting various permissions," said Mr Sangster.

He added that some of the issues they would be looking at would be how to develop an underwater link to the other side of the Haven and transporting equipment in by sea during construction work.