Oil could flow from the Barryroe field off the Cork coast within three years after Providence Resources signed a development deal with Norwegian consortium Spoton on Monday.
Barryroe could yield 350 million barrels of oil, enough to supply all the Republic’s needs for almost a decade at current consumption, along with a significant amount of natural gas.
Providence confirmed on Monday that following months of talks it has signed a partnership, known as a farm-out agreement, with a consortium led by Spoton to develop the field.
The pair hope to start drilling the first of four planned wells in late 2022, implying that oil production could begin within three years.
Providence said Spoton and its backers would fund all of the early and full-field development programmes.
“The early development programme, which includes four wells and floating production facilities, is designed to both appraise and produce the Barryroe field, generating the technical data required to optimise the full-field development programme,” a statement said.
As part of the deal Spoton will get the right to acquire 60 million shares in Dublin-listed Providence at 17 cent a share following the first commercial production of oil from the field.
Barryroe lies about 50km from the Cork coast in the Celtic Sea under 100m of water, which is shallow by modern oil exploration and production standards.
Providence owns 80 per cent of the field, while Lansdowne Oil and Gas owns 20 per cent.
Alan Linn, Providence's chief executive, described the field as world class earlier this year.
The company has been in talks with Spoton for several months. Mr Linn called the deal an exciting opportunity.
“Indigenous production will support Irish energy security, encourage the progress of renewable technologies and deliver raw materials used in the production of many of the essential items we take for granted in our daily lives,” he said.