Key uncertainties impeding the future development of the Barryroe field off the coast of Co Cork could be "substantially reduced" by further appraisal drilling, Irish explorer Providence Resources has concluded in a strategic review.
Providence has been carrying out a strategic review since September into how to develop its Barryroe project, which is thought to have more than 300 million barrels of recoverable oil. It issued a preliminary view on Monday and expects to provide greater clarity by the end of next month.
The group said a “realistic and pragmatic approach” has been adopted in the formulation of its Barryroe strategy, in the light of current regulatory environment, energy transition issues around security of supply, and growing energy demand.
“One of the principal preliminary conclusions from the technical review is that the key uncertainties impeding the future development of Barryroe could be substantially reduced by further appraisal drilling,” it said.
The group has confirmed a previously identified well location is “optimal”, and has successfully completed a seabed site survey. It said the appraisal well could be drilled and evaluated during 2023.
“We anticipate that a new appraisal well will provide excellent technical information to enable execution of the first phase of development of hydrocarbon resources at Barryroe,” it said.
“Preliminary conceptual planning has been progressed with a view to a sequenced development within the central segments of the overall Barryroe field, with first production envisaged during 2026.
“Previous attempts to embark directly on an early development scheme, without the necessary preparatory appraisal work, have serially proven to be unworkable for both financial and technical reasons.”
Providence executive chairman James Menton, who led the review, said an appraisal well will be "essential" before embarking on an initial phased development.
The group said its key objectives would include securing the award of the lease undertaking in relation to the Barryroe field, as well as developing an effective technical strategy for the optimisation of the value of the field through a phased development scheme.
It is also considering and developing an “appropriate funding strategy”, and positioning the company to play “a key role” during the energy transition phase to 2050.
It said benefits that a successful Barryroe development would yield would include contributing to energy transition planning, particularly security of supply.
It would also provide “significant strategic and fiscal value” to the Irish economy at no cost to the Irish taxpayer, as well as reduce dependency on the importation of energy resources.
In addition to the technical and economic aspects of the Barryroe project, the group said it has regard for the “continuing need to attract foreign direct investment in the pathway to achieve the ultimate goal of carbon neutrality by 2050”.
The group has appointed NRG Well Management International to lead the recruitment and organisation of an expanded technical team. The contract is worth €115,000.
It has also retained Cork-headquartered agency AM O’Sullivan PR to develop a stakeholder management and communication strategy to “enhance understanding of the Barryroe project and the opportunities it presents”. The contract is worth €81,000 per annum.
The group has also initiated efforts to recruit a new chief executive having regard to the status of the lease undertaking and the completion of the strategic review.
It said the granting of the lease undertaking for the Barryroe field, which is subject to ministerial consent, is “fundamental” to the execution of the board’s strategy.
“In the absence thereof, and indeed without receipt on a timely basis, the board may not be able to achieve its stated objectives, with fundamental and serious consequences for future viability,” it said.