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
    +5

    Comment number 105.

    Brian ..98..the figure of 280 million barrels is wrong it is 780 million, it is in 85 meters of water 15 miles west of Kinsale and will be ashore in 2015,it is understood there are two more wells in the area showing promise....easy to get at compared to the North Sea....anyway I wish them luck they need some break after the past few years.

  • rate this
    +2

    Comment number 104.

    If it stops them burning their peat bogs it must be a good thing.

  • rate this
    +2

    Comment number 103.

    Spot on SpeakerOftheTruth #76.Remember how North sea oil was going to make Britain self sufficient and no need to worry about oil prices as we have our own.I would like to think Ireland will gain from this find but once the politicians get involved I don't have much hope.

  • rate this
    +9

    Comment number 102.

    I hope the oil will extracted safely without ecological damage, will be transported safely without ecological damage, and it's revenue used ethically and sensibly for the good of the whole country, not immorally to enrich just a few.

  • rate this
    +1

    Comment number 101.

    @98.Brian
    I think you'll find the biggest oil fields are BIGGER than Ireland....

  • rate this
    0

    Comment number 100.

    @35, looks like you're the one being negative here. Yes, on the Global side of things this seems very small but it's all relative surely?? The 280m bbls I think will be a rough estimate at recoverable reserves. If that's the case, you could be looking at 25+ years of production from that I'd say........

  • rate this
    +2

    Comment number 99.

    Does that mean we get back the money we had to lend them to bail out their economy.? Bit of interest perhaps? Somehow I doubt it...

  • rate this
    0

    Comment number 98.

    I read somewhere that it's supposed to be the biggest potential oil and gas field in the world.

    If that's the truth I suspect it'll be 15 years before a drop gets produced.

    The main problem is that it's in a rough area in fairly deep water which means it is expensive to produce. With the price of oil as high as it is, it makes it more worthwhile than, say, 10 years ago.

  • rate this
    0

    Comment number 97.

    58.kane - Interesting, this comment stay's. yet mine was removed.

    Come on mods, if you're insistent on being unnecessarily PC, at least keep it consistent.

  • rate this
    +2

    Comment number 96.

    I think someone's fluffed their sums. The Irish State takes 25% of all *profits*, not *revenues*. ConocoPhillips said a year ago that they made about $17 in profit per barrel, so taking that figure, taxing it at 25% and applying it to all 280mn barrels gives a finger-in-the-air estimate of under a billion pounds at today's exchange rate. Hardly 'oil billions'.

  • rate this
    0

    Comment number 95.

    @89. eMikey

    At best, this will help us recover a bit. But I doubt we'll be anywhere near as well off as we were (or at least, thought we were) in 2007. Hopefully, our politicians won't blow this for us.

  • rate this
    +2

    Comment number 94.

    Let's hope they don't waste this sovereign wealth the way successive UK governments have done with North Sea oil and gas.

  • rate this
    -9

    Comment number 93.

    Don't get England involved in anyway, they will take it all then complain that they are subsidizing you.

  • rate this
    +5

    Comment number 92.

    #64: " if there was any oil in the ground worth exploiting, the big companies would have been here 30 years ago"

    Wrong - the degree to which specific reserves are worth exploiting is based on the cost of extraction and the market value of the resulting product. Higher crude oil prices have made large reserves, all around the world, profitable to exploit.

  • rate this
    -1

    Comment number 91.

    None of which will benefit the taxpayers, just the millionaires.

  • rate this
    +3

    Comment number 90.

    Great news. Well done Ireland.
    How about some good news from the shale gas drilling under Lancashire?
    First Estimates were approx 500 years reserves.
    Great news from the North West, but no doubt the Greens will try to block NW prosperity!

  • rate this
    +9

    Comment number 89.

    The luck of the Irish! ;)

    If handled correctly this could prove a much needed boost to the Irish economy.

  • rate this
    +3

    Comment number 88.

    Tanman 73 it was £ 3 billion loan @ 3.4% by the way the UK exports £120 billion in goods and services to the United Kingdom that according to David Cameron makes the Irish the fifth biggest export market the UK has,I would sugest the £3 billion is a good investment in British jobs keeping maybe 100,000 off the dole

  • rate this
    +3

    Comment number 87.

    Spend the peak production profits (billions) on Cruise Missiles against a phantom enemy? Finance wars on other continents, leaving them worse than before (Libya, Iraq, Afghanistan)? Prop up private companies that were formaly state owned? Hand state money over to major banks to offset their gambling on the USA housing market? NO - I think Ireland may take other options with their new found wealth

  • rate this
    -4

    Comment number 86.

    Shame on the Irish Government and the Irish people for not standing up to Big Oil.

    He said he wants "help..to exploit our natural resources. We cannot do it alone."

    Exploit the natural resources is exactly what is going to happen! Pristine beaches and livelyhoods are stake at the expense of those who want to turn a profit! Renewable investments are the only thing Ireland needs!!!

 

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