Providence hopes to complete deal on Barryroe find

Apec purchased 50% of southwest coast field thought to hold over 300 million oil barrels

Providence  chief executive Tony O’Reilly jnr: noted  Exxon Mobil estimated that 1.5 billion barrels of oil, worth $114 billion could be recovered. Photograph: Cyril Byrne

Providence chief executive Tony O’Reilly jnr: noted Exxon Mobil estimated that 1.5 billion barrels of oil, worth $114 billion could be recovered. Photograph: Cyril Byrne

 

Global interest is growing in an area off the southwest coast that one multinational estimates could hold more than $100 billion worth of oil, shareholders in explorer Providence Resources heard on Thursday.

Tony O’Reilly jnr, Providence chief executive, told the company’s annual general meeting in Dublin that it hopes to complete a deal on its Barryroe oil find with Chinese group Apec in the third quarter of the year.

Providence sold 50 per cent of Barryroe – thought to hold more than 300 million barrels of oil – to Apec in March in a deal designed to bring the well into production.

John O’Sullivan, Providence technical director, told shareholders that there is renewed international interest in Dunquin South, a 25,000sq km area of the Republic’s territorial waters west of Barryroe, off the Kerry coast.

He told the meeting that Providence and several multinational oil companies, including Italy’s ENI and Spain’s Repsol, this year produced reports on the prospects of getting oil from Dunquin.

“We can clearly see that Dunquin South is back on the radar and is something we believe could be a world-class prospect,” he said.

Exploration licence

Providence holds 26.85 per cent of an exploration licence in Dunquin South. Eni, Repsol and British company Sosina Exploration are the other shareholders.

Speaking after the meeting, Mr O’Reilly noted that another multinational, Exxon Mobil, estimated that 1.5 billion barrels of oil, worth $114 billion at Thursday’s price of $76 a barrel, could be recovered from there.

Exxon drilled a single exploration well in the adjoining Dunquin North five years ago, but abandoned it after finding no oil. At the time, there was significant international interest in the Porcupine Basin, of which Dunquin is a part.

Mr O’Reilly explained that further work by Providence discovered a 1 km-wide “bullet hole” in the bedrock in Dunquin North through which the company believes any oil may have drained away.

Mr O’Sullivan said that so far, Providence had found no such problems with Dunquin South.

Providence holds oil exploration and discovery licences in the Republic’s territorial waters running from Spanish Point, an area off Clare, south to a block called Newgrange in the southwestern Celtic Sea and around to Kish Bank, just east of Dublin in the Irish Sea.

The company holds these licences in partnership with multinationals such as ENI, Repsol, Schlumberger and Cairn.

Mr O’Reilly said that Apec is interested in joining forces with Providence on licences other than Barryroe, but indicated that Dunquin South was not one of them.