Financial News

  • 16 March 2012, 10:37

Oil Firm Strikes Black Gold In Emerald Isle

The Irish oil exploration firm Providence Resources has found enough oil in one of its wells to become Ireland's first commerical oil producer, providing a welcome boost to the country's economy.

The Dublin-based exploration company announced that its Barryroe well, in waters off the coast of southern Ireland, is producing oil at a rate of 3,514 barrels of oil per day.

This is almost double the commercial threshold of 1,800 and the company's chief executive Tony O'Reilly told Sky News he expects the well could produce "substantially more" using new technology.

The discovery has raised hopes that Ireland, which is struggling economically and had to seek an 85bn euro (71bn) bailout in late 2010, will be transformed into an oil producer.

"This could herald the renaissance of Irish oil," Mr O'Reilly said, adding that it would be good for the economy by boosting employment and tax revenues.

The oil and gas industry pays a corporate tax rate of between 25% and 40%.

Providence and its predecessor companies have been drilling offshore Ireland for over 30 years.

The firm's boss, whose family owns a 20% stake in Providence, said the company is now looking to upgrade its total field estimates, currently standing at 60 million recoverable barrels.

The oil exploration company controls a significant share of the waters off the coast of Ireland and is partnered with Lansdowne Oil & Gas on the Barryroe well.

Providence has an 80% stake in Barryroe, with Lansdowne Oil & Gas holding the remaining 20%.

Royal Dutch Shell also has interests in Ireland, and is hoping to develop the Corrib gas field off the northwest coast of the country.