Prov­i­dence mulling re­turn to for­eign wa­ters

Irish Examiner - - Business - Ge­off Per­ci­val

Prov­i­dence Re­sources is con­sid­er­ing a re­turn to drilling for oil and gas in in­ter­na­tional wa­ters, al­beit as part of a long-term growth strat­egy.

Speak­ing af­ter the Ir­ish ex­plorer’s agm in Dublin, chief ex­ec­u­tive Tony O’Reilly Jr said man­age­ment would be in­ter­ested — in the long-term — in look­ing at op­por­tu­ni­ties else­where in Eu­rope.

Prov­i­dence turned its en­tire fo­cus to off­shore Ire­land in 2012 fol­low­ing the sale of its off­shore as­sets in Nige­ria, the Gulf of Mex­ico and on­shore Bri­tain.

Prov­i­dence’s near-term fo­cus is, how­ever, very def­i­nitely on Ire­land, and the com­pany is eye­ing an­other large-scale drilling pro­ject by 2020.

Mr O’Reilly con­firmed that its long-awaited farm out deal for its flag­ship Bar­ry­roe field off the Cork coast is ex­pected to com­plete, fol­low­ing the grant­ing of full reg­u­la­tory ap­proval, be­fore the end of Septem­ber.

The com­pany an­nounced a Chi­nese con­sor­tium, headed by Beijing-based in­vest­ment com­pany APEC En­ergy, as its development part­ner at Bar­ry­roe in March. Mr O’Reilly said, yes­ter­day, that APEC is in­ter­ested in part­ner­ing Prov­i­dence on other un­named prospects.

Prov­i­dence al­ready counts Ital­ian oil ma­jor Eni, French gi­ant To­tal and Scot­tish ex­plorer Cairn En­ergy as development part­ners on a num­ber of its prospects off the west coast of Ire­land.

Seis­mic eval­u­a­tion work on an­other of Prov­i­dence’s highly-rated as­sets, the New­grange prospect off the south-west coast, is due to take place over the next three months. Farm-in in­ter­est, from a num­ber of po­ten­tial development part­ners, has been and con­tin­ues to be “strong” Prov­i­dence’s man­age­ment team said. Get­ting a deal over the line this year would al­low for drilling dur­ing 2019 — an al­ready busy year with a six-month, mul­ti­well cam­paign al­ready pen­cilled in, then, for Bar­ry­roe.

How­ever, Mr O’Reilly seemed to sug­gest there was no im­me­di­ate rush to fi­nalise a deal on New­grange be­fore the end of 2018.

Man­age­ment ex­cite­ment, how­ever, is ris­ing over the com­pany’s Dun­quin South prospect, ad­ja­cent to the failed Dun­quin North drill in 2013. Prov­i­dence’s tech­ni­cal di­rec­tor John O’Sul­li­van said it is “ma­tur­ing into a po­ten­tial world-class prospect”, with an es­ti­mated 1.5bn re­cov­er­able bar­rels of oil.

Mr O’Reilly said Dun­quinSouth, which Eni now op­er­ates with Prov­i­dence as a near 27% owner, could po­ten­tially see drilling by 2020.

Mean­while, Prov­i­dence is cur­rently sup­ply­ing in­for­ma­tion to the Ir­ish Off­shore Op­er­a­tors’ As­so­ci­a­tion ahead of the start of hear­ings, next month, when a Peo­ple Be­fore Profit’s bill aimed at ban­ning fu­ture drilling in Ir­ish wa­ters reaches Oireach­tas com­mit­tee stage.

Mr O’Reilly yes­ter­day said the mat­ter is likely to prove “a long process” but said the is­sue should be more about “evo­lu­tion, not rev­o­lu­tion”.

“The de­bate has to take place, but peo­ple have to deal with the facts. We have to keep the econ­omy go­ing and Ire­land needs oil and gas for the fore­see­able fu­ture. There are also the ques­tions of jobs, tax ben­e­fits to the State and se­cu­rity of en­ergy sup­ply [to con­sider],” he said, but added the bill is “a con­cern” to the in­dus­try.

Mr O’Sul­li­van pointed out that New Zealand — which im­posed a ban on fu­ture drilling in its wa­ters — is now fac­ing the prospect of gas short­ages in less than a decade.

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