Ireland 'close to oil billions'

 
Irish oil rig, Barryroe Barryroe off County Cork could yield 280m barrels, Providence says

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Ireland is on the verge of securing revenue from oil that could run into billions of pounds.

Providence Resources Plc, an Irish and UK company, has confirmed its Barryroe site, 30 miles off the Cork coast, should yield 280m barrels of oil.

The money generated will depend on the market value at the time of extraction and on licensing arrangements.

Providence chief executive Tony O'Reilly Jr said this was the beginning of an Irish oil industry.

He described it as a huge success story, following decades of exploration around the Irish coast.

"The great news today is that Barryroe is on a path towards development," he told BBC Northern Ireland's Good Morning Ulster.

Mr O'Reilly said more work needed to be done and issues such as taxation revenue, security of supply and jobs needed to be addressed.

But he said: "What we are announcing is the beginning of that (oil) industry.

"We hope there is a renaissance of interest by international companies who need to come to Ireland and help us to exploit our natural resources. We cannot do it alone."

Mr O'Reilly said the oil recovery rate at Barryroe had exceeded expectations and, with oil at about $100 per barrel (77 euros; £62.5) it offered "a lot of value".

He was also swift to reject critics' suggestions that Ireland would have little role in the industry and oil would not be landed there.

"We intend to utilise the structure of Ireland. We have been very clear in that regard. It makes good business sense for us. It is mad that we would take it elsewhere," he said.

Exxon Mobil

Providence intends to attract multi-national energy giants to "farm in" to its licence, which it bought from the Irish government for a nominal fee.

The company has already secured the expertise of the world's leading oil multi-national, Exxon Mobil, to explore its site at Drumquin.

However, campaigners have said that Ireland's relaxed laws with regard to its natural resources ought to be overhauled.

Ireland takes 25% of all profits, rising to 40% depending on the volume extracted.

Ireland's Energy Minister Pat Rabbitte concedes that the take is much lower than in the UK, or Norway, both of which have much greater resources of oil and gas.

But he says that the rate must remain attractive to foreign companies as Ireland does not have the expertise or revenue to exploit the reserves itself.

Others point out that all exploration costs can be off-set against any tax liable ones, and that a claim can go back as far as 25 years.

Providence is believed to have spent £0.5bn exploring Irish waters.

Campaigners like William Hederman, of Irishoilandgas.com, have warned that the oil from Barryroe may never be landed in Ireland, but instead taken for refinement to Europe or beyond, meaning fewer jobs on Irish soil.

And the Irish Green Party has also expressed reservations.

Environmental concerns

In July, its leader Eamon Ryan said he was wary of quoted figures over oil resources which had not yet been tested.

"Oil may be there but there is a limit on how much you can get out, and this is still only a tiny fraction of what would be used," he said.

"Like any drilling at sea, there are risks to it - the highest standards need to be applied."

The RSPB has also voiced concerns about any potential oil extraction around Rathlin Island, off County Antrim, a Special Area of Conservation and a Special Protection Area (SPA), which it argues is too important for wildlife to allow that to happen.

It says the potential impact of oil drilling on Rathlin Island has not been fully explored.

Meanwhile, Providence says its intention is to take the oil from Barryroe to Cork, but that it is a decision that will be made on a commercial basis closer to the time of extraction.

Some 25% in revenue of what is potentially billions of pounds worth of oil will, however, be a huge boost to a country which has never successfully extracted a drop of oil in the past.

 

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  • rate this
    0

    Comment number 45.

    I predict the already beaten and bruised Celtic Tiger will soon be in a wildlife center, being hosed down with detergents to remove the pernicious effect of oil.

  • rate this
    +2

    Comment number 44.

    Would point out that the Irish Republic have a loan of £ 3 billion from the UK,Sweden and Denmark have also loaned the same amount,the UK exports around £ 120 billion in goods and services every year,the Irish Republic is the fifth largest market in the world for UK exports if this was gone so would UK jobs.About time something went right for Ireland,let's hope they make it a Merkel Free Zone!!

  • rate this
    +1

    Comment number 43.

    Strange that none of this is being reported in the Irish media.
    Is this an omen for any oil that is extracted?

  • rate this
    0

    Comment number 42.

    Ireland, don't blow it all on another horse or house this time.

  • rate this
    +7

    Comment number 41.

    Get your tin hats on boys, the Americans are coming!

  • rate this
    -6

    Comment number 40.

    Ireland wont be able to handle the volatile change in oil prices, suggest they be like Scotland and have a union with Westminster, and let Westminster handle the oil revenues for them!

  • rate this
    0

    Comment number 39.

    It will be like pumping Guiness out of the sea, every Irishmans dream job, where can I apply?

  • rate this
    +3

    Comment number 38.

    Aw lads! I can just see the headlines 7 or 8 years down the pipeline: Cork City FC sign Brazilian superstars in lucrative deal.

  • rate this
    +37

    Comment number 37.

    Lets hope America doesn't invade them to give them "democracy ™".

  • rate this
    +7

    Comment number 36.

    If this is a bonanza for Ireland then I wish them all the best. Life over in Eire has not been rosy since the Euro crisis. What with being included in that derogatory term PIIGS. Just make sure Eire Government that you include all the Irish people and don't sell the windfall off for some short termed gain. Talk to Norway they seem to have benefited the way the U.K. failed to. I wish you well.

  • rate this
    +4

    Comment number 35.

    All well and good, but you're all missing the point. In terms of oil discoveries this is tiny. Global output/demand is for around 85 million barrels per day, a 280 million barrel well is small fry. It will no doubt provide a decent income but for how long? This never ending quest for oil is turning up less and less results. Time to switch to renewables people!

  • rate this
    +41

    Comment number 34.

    I suggest the Irish government sets up an oil fund similar to that run by the Norwegians, ASAP!

  • rate this
    0

    Comment number 33.

    22. hardworkedandunderpaid
    ...” & any jobs created go to Irish men & women first”.

    That’s not the way it works in this industry; my last Boss in the UK North Sea was Nigerian & the one before it was...wait for it...Irish.
    By comparison, North Sea jobs don’t automatically go to Scottish people, it’s a global industry.
    28. Southseas is correct.

  • rate this
    +26

    Comment number 32.

    This cannot be bad news for Ireland. Access to revenues from carbon fuels has to be a positive thing.

    But don't expect the citizens of the Republic to be driving luxury cars and building shiny, ugly hotels, Persian Gulf style. Ireland has been so batterred by years of credit-fuelled debt that it will take a generation or more to repair. The oil revenues should help, if used wisely.

  • rate this
    +4

    Comment number 31.

    Rabbitte is wrong to intimate that Ireland cannot develop expertise in this area, Norway has proved that "expertise" can be gained, paying to develop such would be a long term investment something that Rabbitte and his cohorts seem blind to.

  • Comment number 30.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 29.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +3

    Comment number 28.

    Where the UK lost out so will Ireland. When North Sea Oil started all the workers, research and technology were from US this is where the money goes.
    So you get 25% of the profit but the profit on 114$ a barrel is probably 20$. The other $94 has gone elsewhere
    When your oil is finished the workers and technology move on. Brazil demand that 50% of oil workers are Brazilian so should Ireland.

  • rate this
    +22

    Comment number 27.

    Let's hope that any wealth generated by this resource is properly invested by the Irish Government for the long term benefit of RoI citizens.

    In other words, do the exact opposite to what successive British Governments did with the cash generated by North Sea oil when our British governments used the money to buy votes with increased welfare benefits and tax levels way below spending levels.

  • rate this
    +4

    Comment number 26.

    Circa €22 billion worth of oil less exploration costs; less running and overhead costs and dividends etc. = profit!!! Irish government gets 25% of this!!! This Irish resource will make the very wealthy even more wealthy and as far as the citizens of Ireland are concerned, I can't see this making any difference to them since they are likely to never see a cent. Well done BBC great journalism!

 

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