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from the Department of Communications, Energy and Natural Resources:
Minister O Dowd welcomes announcement by Providence Resources that testing for the Barryroe oil appraisal well has been successful.
Minister O’Dowd says he is pleased to see an emerging new exploration play off Ireland's coast.
Dublin, Thursday 15th March 2012
Barryroe Well 48/24-10z - Test Results
Standard Exploration Licence 1/11, North Celtic Sea Basin, Offshore Ireland
Dublin, 15 March 2012
Mr Fergus O Dowd, T.D., Minister of State at the Department of Communications, Energy and Natural Resources, welcomes today’s announcement by Providence Resources plc that testing of their Barryroe oil appraisal well, 48/24-10z, has been successful. The flow rates achieved are the highest so far for any testing operations in the Wealden formation and represent the first significant flows of oil on test anywhere offshore Ireland in twelve years. Commenting on the announcement, Minister O’Dowd said
“I am particularly pleased to see such significant flow rates from the basal Wealden sandstone which is emerging as a new exploration play within this basin.
My Department is actively promoting exploration for oil and gas both for security of energy supply and as a potentially valuable source of revenue. The results of the Barryroe well further demonstrate the hydrocarbon potential present offshore Ireland and this good news should be of considerable interest to the oil industry.
Finally, may I wish Providence and their licence partner Lansdowne Oil & Gas plc every success with their endeavours and hope that the substantial work programme they have committed to on Barryroe will lead to a development.”
Department of Communications, Energy & Natural Resources,
29-31 Adelaide Rd,
+353 1 6782441 / 087 6937580
Barryroe oil output could hit as much as 20,000 barrels a day
By Conor Keane, Business Editor
Friday, March 16, 2012
Oil production at Ireland’s first commercial discovery could reach as high as 20,000 barrels a day when production commences at the Barryroe field in the next three years.
Yesterday, Providence Resources chief executive Tony O’Reilly Jnr confirmed Wednesday’s Irish Examiner story that a commercial oil field had been discovered.
Providence Resources technical director John O’Sullivan said that depending on the production strategy deployed, the field could produce as much as 20,000 barrels per day (bopd). The UCC geology graduate said they may utilise horizontal wells to give better access to the 300 sq km oil field — equivalent to a medium to large North Sea oil field.
Mr O’Reilly said flow rates of 3,514 bopd had been discovered at 100-metre depth in the North Celtic Sea Basin.
"The well has also confirmed that the basal sands are laterally continuous, highly productive and that the oils are of a very high quality," he said. This is twice the 1,800 bopd target set by Providence as being large enough to deem it a commercial find.
Mr O’Reilly, whose family owns a 20% stake in Providence, said the company was looking to upgrade the total field estimates, standing at 60 million barrels of recoverable oil.
"Hopefully those resource figures will increase and the recovery factor will increase and allow us to have substantial production... we haven’t put out any numbers though we do feel that there is an opportunity for an upgrading in the size of this accumulation," he said.
Mr O’Sullivan said the 500 bopd equivalent in gas, which the well is throwing off, would be used to power a production oil rig. Any spare capacity could be diverted to the gas pipeline serving the Seven Head Gas Filed, just 3km from Barryroe discovery.
In a flash equity note, Davy Stockbrokers analysts Job Langbroek and Caren Crowley said the find had important implications across the board and upped the price target for the company’s shares which are traded in Dublin and London.
This is the fifth time oil has been hit during explorations of the Barryroe licensing block, but the other wells fell below the 1,800 bopd commercialisation target and were drilled in the 1970s and 1990s by Esso and Marathon. Three wells were drilled in the 1970s by Esso and a further well was drilled by Marathon in the early 1990s and all four wells encountered hydrocarbons.
Mr O’Reilly said while the original drills confirmed oil accumulations, modern technology in the industry had brought exploration on leaps and bounds.
Mr O’Reilly said he hopes the discovery will lead to the creation of an onshore oil industry in the country. He said all the equipment, personnel and services he needs to work on a well come from Aberdeen. "Why can’t we have a surface industry in Ireland to service the Irish offshore?" he asked.
Mr O’Reilly praised the Providence team and contractors that helped establish the find as commercial. "Given that we only assumed operatorship of Barryroe in late 2010, I would like to pay tribute to all of the team members who have helped to deliver such a successful outcome to this programme", he said.
The data represented the first "significant" test flows of oil off Ireland in 12 years, Energy Minister of State Fergus O’Dowd said in a statement.
This appeared in the printed version of the Irish Examiner Friday, March 16, 2012
State to cash in on oil strike
By Thomas Molloy
Friday March 16 2012
An oil strike off the coast of Cork could be worth hundreds of millions of euro to the economy, with the Exchequer set to benefit massively.
Providence Resources -- the biggest oil exploration company operating in Irish waters -- yesterday said that the oil find off the south-west coast was much larger than anticipated.
The Barryroe oil field, about 50km from Kinsale, has better quality oil than previously thought and much bigger quantities of the black gold. It had previously been estimated that the field held 60 million barrels of oil but it is now believed to be much larger.
According to oil expert Job Langbroek of Davy stockbrokers, the find will generate at least $600m (€458m) profit. And the State will benefit as it taxes these profits at between 25pc and 40pc.
"The only region in the UK that hasn't had a recession is Aberdeen," said Mr Langbroek. "This is largely due to its oil industry."
Shares in Providence jumped as much as 20pc in Dublin and London as investors cheered the news.
The company said a test well produced oil at a rate of 3,500 barrels a day -- almost twice the rate needed for the field to be commercial.
"This is a wow day," Providence chief executive Tony O'Reilly told the Irish Independent.
Belief that Ireland has oil reserves has "gone from scepticism to wow", he added.
New drilling techniques and computer technology is allowing explorers to find oil and gas in areas that were once seen as hopeless. Tullow Oil, which also has Irish links, has discovered oil in Ghana and transformed the local economy.
Providence will now sift through information gathered over the last few months and publish a new estimate within months for the amount of oil within the 300 sq km field. It will probably take Providence two or three years to begin pumping the oil ashore.
The company has had about 60 calls from companies in the Scottish oil capital of Aberdeen, Mr O'Reilly said.
"In the old days if you mentioned Ireland, people would cross to the other side of the street. It's not like that now."
Providence is flying workers from Aberdeen every day to work on the exploration programme because the Irish oil industry is too small.
"I really hope this changes," added Mr O'Reilly, who is a son of Providence's largest shareholder, the newspaper magnate Sir Anthony O'Reilly.
The find came early in Providence's €500m exploration programme, which is looking for oil in six huge swathes within Irish waters.
A series of discoveries in any of these basins would generate significant funds for the Government. Several other north European countries, including Britain, Denmark, the Netherlands and Norway, have seen huge boosts to the economy in recent decades following significant oil finds.
"The discovery could be very rewarding because anywhere from 25-40pc tax would be payable on a commercial development. That would be a very big boom for the Irish Exchequer," Mr O'Reilly said.
While Barryroe is around the same size as a medium to large North Sea oil field, the geology is different and the oil may be more difficult to extract.
However, Providence said that the oil was less viscous than water and less waxy than previously thought. This means the oil coming from Barryroe is likely to be better quality than Brent crude and will sell for higher prices.
Evidence from the drilling suggests that the size of the reservoir is also much bigger than previous forecasts of 60 million barrels, prompting some analysts to predict that the amount of oil that can be removed from the sea will be twice as much as previously thought. The reservoir also appears to be one giant pool rather than separate chambers, which would have complicated the drilling process.
The results "represent the first significant flows of oil on test anywhere offshore Ireland in 12 years", Junior Energy Minister Fergus O'Dowd said.
Providence owns 80pc of Barryroe while London-listed Lansdowne Oil & Gas owns the rest. The exploration companies will now likely bring in production partners to share the cost and risk of drilling for oil.
- Thomas Molloy
Oil's well but no sign of Dallas fever in Cork
Sat, Mar 17, 2012
Bright spark: an oil rig operating in Barryroe. Photograph: Finbarr O'Rourke/Providence Resources/PA
The announcement that the Barryroe oil field off the Cork coast is commercially viable has been welcomed, but nobody is counting their barrels just yet
‘WE ALREADY HAVE the southern accents, but we will probably have to get 10-gallon Stetsons to prove we’re real oilmen,” quipped one wag to another on Cork’s South Mall this week as news broke that oil had been found off the Cork coast.
Not that anyone was rushing around the streets of the city predicting that Leeside was set to become another Dallas after Providence Resources announced test results on the Barryroe oil field had confirmed it was commercially viable.
True, the Evening Echo did herald the news with a front-page splash under the headline, “Oil Right Boy!”, but nobody on Leeside is swotting up on the intricacies of Brent crude to impress their friends just yet.
Indeed, the response has been, if not muted, then certainly measured from all sides of the political and environmental divides involved in debating such matters – a reflection perhaps of the recognition that oil may well help us out of our economic.
Cllr John O’Sullivan of Fine Gael, who lives in and represents the coastal parish of Barryroe between Kinsale and Clonakilty, says: “I suppose people in Barryroe aren’t really expecting any great local spin-off in that it’s 50km off shore and the expectation is that the oil will be piped to Whitegate and the rig serviced by helicopters from Cork Airport, so there won’t be much benefit for the local area.
“At the same time, it’s good news for the Cork economy and the Irish economy and people obviously welcome that.
“There have been four or five wells drilled over the past 20 years and every time it seemed that we were on the cusp of a major discovery, it fell through.
“I wouldn’t say people were sceptical after news broke over the last few months about oil being found, but they just wanted to wait and see what materialised in terms of commercial viability given previous experiences and now that looks very positive.”
Esso had drilled three wells in the field in the 1970s and Marathon had drilled another one there in the 1990s, but none had proven commercially viable. However, rising oil prices and advances in technology have changed all that for Providence Resources.
According to Tony O’Reilly, the chief executive of Providence, flow rates of 3,514 barrels of oil a day have been confirmed at the Barryroe field, almost double the the company’s stated target rate of 1,800 barrels a day, which would make the 100-metre deep site commercially viable.
“The well has also confirmed that the basal sands are laterally continuous, highly productive and that the oils are of a very high quality,” said O’Reilly in a statement, while Providence technical director John O’Sullivan predicted flows could reach 20,000 barrels a day.
The news has been welcomed by Cork Chamber whose chief executive Conor Healy points to the advantages of the oil being brought ashore in Cork and the benefits it could create for the local economy.
“Clearly, it’s early days yet and we look forward to understanding more about the field’s potential – obviously it has national significance for Ireland but it also offers great promise in terms of additional economic activity for Cork too.
“Cork has a long track record of infrastructure provision for energy-related projects such as the Whitegate oil refinery, while we also have a workforce with engineering and project management experience from the pharmaceutical sector going back 20 years.”
THAT EXISTENCE OF of infrastructure also informs the views of former Green Party TD and senator, Dan Boyle, when he suggests that Cork may not find itself embroiled in the sort of controversy that Mayo has experienced when it comes to bringing the oil ashore.
“Obviously it’s an economic fillip for Ireland and one that we badly need. We are entering the era of peak oil and oil will run out, but we might as well take advantage of this discovery while we can,” he says.
“We have some advantages in Cork in terms of existing infrastructure. We already have the Kinsale gas pipeline and an oil refinery in Cork Harbour, so we should not experience the sort of difficulties that other places have in terms of setting up new infrastructure.”
Tony Lowes of Friends of the Irish Environment says: “I would expect that the infrastructure is already there – I wouldn’t like to be facing into another major refinery or development along the coast, but I don’t think that’s going to be necessary.”
However, he stressed that there remained the possibility of environmental damage and it was important government agencies ensured proper regulatory standards are maintained.
It could take up to three years before the oil starts coming ashore, but rather than thinking Dallas, Corkonians might be better advised to look north to Scotland where Aberdeen underwent huge economic development on the back of North Sea oil.
© 2012 The Irish Times