Business Irish

Thursday 29 June 2017

Irish projects worth €1.6bn shelved as oil crisis deepens

Globally $400bn of spending on new oil and gas projects has been shelved since the price of crude oil collapsed. Photo: Getty Images/Ingram Publishing
Globally $400bn of spending on new oil and gas projects has been shelved since the price of crude oil collapsed. Photo: Getty Images/Ingram Publishing
Sarah McCabe

Sarah McCabe

Companies have delayed developing Irish oil and gas projects worth an equivalent of 60 million barrels in the past year due to major falls in the price of the commodity, a new study has found.

An authoritative study by energy consultancy group Wood Mackenzie found that the development of reserves equivalent to about 60 million barrels off the coast of Ireland - worth about $1.8bn (€1.6bn) at this week's price of around $30 a barrel - has been postponed because of massive price falls in 2015.

Globally, the study found that energy groups have shelved nearly $400bn of spending on new oil and gas projects since the price of crude oil collapsed.

The development of 68 significant projects, or 27 billion barrels of oil equivalent in reserves, has been postponed as companies scramble to curtail costs and funding dries up, Wood Mackenzie said.

Companies which have delayed previously announced drilling plans off Ireland in recent months include Cairn Energy and Providence Resources. Late last year, Providence got another two-year extension on its Barryroe oil field. Development of its other most promising asset, at Spanish Point off the south-west coast, has also been delayed.

Some companies, such as Kosmos Energy, abandoned plans altogether. The US company came to Ireland in 2013 and bought into two licence blocks. Drilling was supposed to begin next year.

Kosmos looked for a partner to help split the costs of the project, but was unsuccessful. Last September, it announced its intention to pull out of Ireland completely in favour of focusing on its African assets.

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