Providence receives approval to explore new oil prospect off Irish coast

Irish oil and gas explorer Providence Resources has received approval from the State to advance work on a licence off Ireland’s southwest coast.

The licence, in which Providence has a 40 per cent stake, is located in the southern Porcupine Basin and contains a prospect known as Avalon.

The Minister of State at the Department of Communications, Climate Action and Environment Seán Canney confirmed approval of the change from a licensing option to a frontier exploration licence.

Joint venture

Providence, which is led by Tony O’Reilly jnr, has already signed what’s known as a farm-out agreement for the prospect, with its joint venture partner Total agreeing to pay 60 per cent of drilling costs. This is subject to a cap of $42 million (€37 million).

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John O'Sullivan, technical director at Providence, said: "Avalon is a very large and exciting prospect, which lies adjacent to Dunquin north, and the joint venture partners look forward to progressing it further under the operatorship of Total."

Providence is gearing up for significant activity this year with drilling on its Barryroe prospect off the Cork coast to begin in the third quarter.