Providence starts drilling programme off Irish coast
PROVIDENCE Resources began drilling for oil off the Cork coast yesterday as the company kicked off the most ambitious drilling programme ever in Irish waters.
Providence and its partners plan to spend more than $500m (€369m) as they look for oil and gas in six areas off the Irish coast.
The company is using a semi-submersible drilling rig called the Arctic III to look for oil in the Barryroe field, one of eight fields where Providence is licensed to search for oil.
It is the first well in more than 20 years to be drilled in this offshore area, which is relatively close to the Kinsale gas field that supplies around 15pc of the country's gas needs.
"This is a very exciting time for Providence and its shareholders and we look forward to updating the market on the progress from this well," chief executive Tony O'Reilly said in a statement yesterday.
Providence is hoping that high oil prices and new technology, which uses computers to generate three-dimensional images of oilfields, will enable the company to succeed where others have failed.
Three wells were drilled in the 1980s and 1990s but they did not yield enough oil to justify commercial drilling programmes at a time when oil prices were lower than they are today and technology was not as advanced.
Providence holds half of the Barryroe licence, while London-listed partners San Leon Energy and Lansdowne Oil & Gas own the rest.
"This is very significant moment for all three of the companies involved in this well," Davy Stockbroker analyst Job Langbroek said.
"The Irish offshore, especially the Celtic Sea, has promised much in the past but has ultimately not managed to deliver a commercial development other than the Kinsale Head and Ballycotton gas fields," he added.
The company hopes to use vacuum-insulated tubing, which has successfully sucked oil out of the seas around the Falkland Islands off the coast of Argentina, to gain access to the estimated 59 million barrels of oil in Barryroe.
Analysts say the Barryroe field is one of the more important fields owned by Providence.