Friday 19 January 2018

The Punt: Exxon's empty-handed exit shows path to oil wealth not always paved with gold

Providence Resources has confirmed a resource base of between 1 billion and 1.6 billion barrels of oil in place at Barryroe (pictured), with further potential for incremental resource growth.
Providence Resources has confirmed a resource base of between 1 billion and 1.6 billion barrels of oil in place at Barryroe (pictured), with further potential for incremental resource growth.

THE oil industry has a reputation at this stage for being a path to easy money. It's easy to think that all we ever hear about are the successes of the likes of Chevron, Exxon and the like. This week has brought home just how difficult the gig can be to actually find the oil in the first place.

Seismic surveys only go so far. If a company truly wants to know if there is oil in a particular place, they have to get drilling.

Providence Resources has about 16pc of the Dunquin North prospect, off the west coast. Long seen as the site with the most potential, Dunquin had been, until recently, the jewel in the Irish offshore crown. It was also notable because it was the only licence that the behemoth Exxon was involved in, in Irish waters. Unfortunately, an assessment well has come up with nothing. Exxon has effectively pulled out of Ireland and Providence shares have gone off a cliff.

A day later Tullow Oil, long seen as one of the most successful explorers, came up with its third dry hole in a row in French Guiana, while a play in Mozambique also failed to produce oil. Its shares, too, fell off a cliff.

The oil business is great, if you know where the oil is. Unfortunately for Providence boss Tony O'Reilly Jnr and Tullow's Aidan Heavey, they are finding out what happens when the oil isn't where it's supposed to be.

Local record store accepts defeat after HMV threat

EVERYONE loves a good underdog story, especially in the current economic climate.

But sometimes the underdog just isn't strong enough.

Music giant HMV has had its troubles this year, with stores closing both here and in Northern Ireland.

But Derry businessman Martin Doherty decided to fill the void left by the closures and opened his own music store, employing an ex-HMV manager.

But they somewhat cheekily called it HVM.

One week after opening, they got a cease and desist letter from HMV demanding they change its name, and accusing it of causing confusion.

Who would have thought a small outlet could have ruffled so many feathers?

They've been forced to change the name now, and to save money, they simply inverted the sign.

HVM has become WAH.

"We were under the impression from our solicitors that we could argue our case, but who has money to throw at solicitors?," Mr Doherty said.

"We had little choice. This is a fledgling business running a week. If we pour money into solicitors' bills, I can't supply stock."

Airport chiefs latest to fall 'vowel' of corporate text speak

IT seems abbreviations are in vogue. Just weeks after Ernst and Young's decision to change its name to "EY", the Government has taken the bold step to rename the Dublin Airport Authority as "DAA".

The Department of Transport said the words 'Dublin' and 'Authority' did not fully reflect the company's business focus or ethos, which also includes Cork Airport, and called the move "pragmatic and cost-effective". The Punt remains unmoved: there are lots of changes that could help cut costs at Dublin and Cork airports, but a name change isn't one of them – especially given rebranding costs.

We are sad to see the loss of the Dublin Airport Authority moniker – it had a nice ring to it – and are getting a bit tired of the corporate fad for abbreviations and text speak. It's no wonder some firms in the UK have been sending young recruits on courses to "de-text" their speech because they can no longer hold a proper conversation. Business representative body IBEC has even said that abbreviated text-message English is appearing on job applications.

Still, we don't like to be on the tail end of the trend. Could we see the end of The Punt – and the entrance of TP?

Favourite bows out of RBS race

BROWS must be furrowing over at Royal Bank of Scotland with the news that Mark McCoombe, the rumoured favourite for the top job at the bank, has bowed out of the race. BlackRock executive Mr McCoombe, a former HSBC banker, emailed senior staff at his US asset management company first thing yesterday morning to confirm he would not be leaving.

This doesn't bode well for RBS, who are on the hunt for a new chief executive after Stephen Hester's (pictured) shock resignation. Whoever gets the job is set to be handed responsibility for a five-year overhaul and privatisation of the institution – including responsibility for loss-making subsidiary Ulster Bank.

The Punt feels at least a degree of sympathy for RBS chairman Sir Philip Hampton and Anna Mann's MWM headhunting firm, who have reportedly spent the past three weeks interviewing candidates and garnering outside views in a bid to name a new chief executive by August 2, when the bank reports second-quarter results.

David Roberts, a former Barclays executive who sits on the Lloyds board, is seen as a credible candidate. We wait with bated breath.

Irish Independent

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