Oil and gas set for €500m cash boost as prices on up

AROUND €500m is set to be invested in Ireland’s oil and gas sector over the next two years, according to a new survey by PwC.

The figure, based on responses from 57 oil and gas companies here, comprises investments in exploration activities like drilling or shooting seismic imaging, according to Ronan MacNioclais, a partner in PwC’s oil and gas practice.

“The stabilisation and improvement in oil and gas prices in recent times has had a positive impact on the Irish oil and gas industry. Over half reported a high level of optimism in relation to the level of petroleum they believe has yet to be discovered in Ireland, in spite of the lack of historic commercial discoveries here.

“Nearly two-thirds are positive about the future outlook for the Irish oil and gas sector. This is manifested by the fact that a number of drilling programmes are planned in Irish waters over the course of the next few years.”

The survey also addressed the future in light of Ireland’s efforts to reduce carbon emissions. An opposition bill designed to ban new exploration licences is before the Dáil. However last week Sean Canney, the minister of state for rural affairs and natural resources, indicated the Government will block the bill, saying it “will do nothing to reduce our use of oil or gas”.

“It proposes simply to bind us to only importing our future oil or gas needs. By any estimation we will continue to need oil and gas supplies into the future, in particular for aviation and marine transport.”

The PwC survey found that it has become increasingly difficult for firms operating in the sector here to find so-called farm-out partners – other companies which take stakes in exploration prospects.

Just under 40pc said it was “very difficult or reasonably difficult” to find partners to farm-in to Irish assets, compared to 10pc in 2017. But Mr MacNioclais said that in some ways the figure is a positive because it shows that companies are looking for partners.

Much of the investment is likely to come from Providence Resources in tandem with its partners in the Barryroe prospect off the Cork coast. The company, led by Tony O’Reilly Jr, is gearing up for a multi-well programme alongside a Chinese consortium that has farmed into the project.

“Predator Oil & Gas is hoping to drill in its Corrib South field in 2020 and Europa Oil & Gas are aiming to drill their Inishkea prospect in 2019 or 2020,” the report said.

‘Nearly two-thirds are positive about the future outlook for the Irish oil and gas sector’