Total quits oil search deal with Providence
Total E&P Ireland, a subsidiary of the French multinational oil giant, has withdrawn from the Providence Resources frontier exploration licence (FEL) off the west coast of Ireland.
Total had agreed a farm-out with Providence in 2017, with the French group taking a 50pc increase in the prospect.
Under the terms of the 2017 deal, Total would have paid 60pc of any drilling costs, subject to a gross well cap of $42m (€38m).
Providence and partner Sosina have now been assigned Total's equity in the licence. In addition, the Department of Communications, Climate Action and Environment has transferred the operation of the licence to Providence.
Please log in or register with Independent.ie for free access to this article.
Tony O'Reilly, CEO of Providence, said he was "sad" to see Total withdraw from the Irish sector in general and Avalon specifically, "as they have been an excellent partner over the past few years".
"Total did some great technical work as operator of FEL 2/19, where the joint venture recently acquired new 3D seismic data," he said.
"Providence and Sosina will now continue with the evaluation of this data in conjunction with a new farm-out process to bring in a suitable industry partner to assist in a future drill decision for the Avalon prospect."
It has been a difficult year for Providence, which has seen its share price fall over 70pc.
Last month the company said it was ending its exclusive relationship with a Chinese backer on its Barryroe prospect after the deadline to receive a $9m loan from the Apec group passed without the funds materialising. The loan was initially expected to arrive in mid-June.