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Danny Lawson/PA Wire

Dublin firm hopes to strike it rich with rare multimillion oil project off Irish coast

Providence Resources has struck a deal to drill an offshore well to the island’s south-west.

AN IRISH EXPLORATION company has struck a deal to drill off the coast of Ireland in the hope of making a major oil find.

Dublin-based Providence Resources announced this morning that has signed a contract with marine transport company Stena International that will provide the Irish firm with a deepwater rig.

Providence said that the plan is to start drilling the well, located in the southern Porcupine Basin about 220km off the south-west coast of Ireland, in June 2017. It added that these plans are “subject to regulatory approvals and consents”.

The location that the company is set to drill in contains licences for two of its projects named ‘Druid’ and ‘Drombeg’.

Providence estimates that there could be as much as 3.2 billion barrels of oil at its Druid location.

Estimate

However, this is an ‘un-risked’ estimate of prospective resources – these estimates do not factor in the chance of drilling a successful well.

As oil wells generally have low success rates, particularly in Ireland, the risked value would likely be a fair bit lower.

The estimate also refers to prospective resources. This refers to all the oil that an oil company’s research shows should exist at a location.

This differs from reserves, which covers oil that is confirmed to exist and can be recovered at a reasonable cost. Prospective resource oil estimates are often much higher than proven reserves.

providence druid map 2 The location of Providence's Druid licence (bottom left) Providence Resources Providence Resources

Even with these caveats though, the amount of oil at the Druid well could be very large if drilling is successful.

Providence said that its drilling contract provides “for one firm well, plus an additional option for the drilling of a second follow-on well”.

Cost

Providence has an 80% stake in the project and is leading exploration on the well. The company estimated in August that the Druid exploration well could cost $35 million, with the company today saying the operational rig rate will be $185,000 (€175,206) per day.

This is actually relatively cheap for drilling a well, particularly in deep water off the Irish coast, where costs could often be close to double that amount. Drilling is cheaper at the moment due to low oil prices.

If the project goes ahead as planned, it would be one of the first drills for oil by an Irish company in Irish waters since oil prices crashed about two years ago.

Providence Resources CEO Tony O’Reilly said that the company is “delighted” to have signed the rig contract with Stena.

“Our previous exploration collaboration project highlighted the significant hydrocarbon potential of (the drilling location) which we will now be evaluating using the drill-ship,” he said.

“The signing of this rig contract is a major milestone in the project plan to enable the drilling of this high impact exploration well during summer 2017.”

Written by Paul O’Donoghue and posted on Fora.ie

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    Mute Todd Hebert
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    Nov 24th 2016, 3:47 PM

    I hope they go bust and leave the oil where it is… which is where it belongs. We should be developing *only* renewable and clean energy sources.

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    Mute John Reese
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    Nov 24th 2016, 4:39 PM

    @Todd Hebert: better disconnect your house from the power grid and hand in the keys of your car is your so against fossil fuel. Cold out isnt it

    54
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    Mute Gavin Daly
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    Nov 24th 2016, 9:42 PM

    @John Reese: we need to transition. if we don’t we’re screwed. period

    8
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    Mute Ordinary lad
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    Nov 24th 2016, 4:15 PM

    That oil belongs to Cork; not Ireland.

    71
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    Mute Niall O Connor
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    Nov 24th 2016, 3:45 PM

    Providence has a long history of earning directors’ salaries on the basis of Atlantic Resource promises.

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    Mute Gavin Daly
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    Nov 24th 2016, 9:44 PM

    @Niall O Connor: yep. Its almost as if The Journal is on commission for running these ridiculous stories all the time

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    Mute Padraig
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    Nov 24th 2016, 3:36 PM

    We’ll be rich beyond our wildest dreams.

    61
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    Mute cryptoskitzo
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    Nov 24th 2016, 4:13 PM

    I hope the next article is not about climate change and how I’m responsible. Promoting climate change awareness and celebrating a potential oil find that requires deep sea drilling kinda conflicts..don’t ya think

    48
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    Mute Kieran OKeeffe
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    Nov 24th 2016, 3:58 PM

    Unless the state benefits from any find immediately the first barrel is landed..leave it there..

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    Mute Dave Doyle
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    Nov 24th 2016, 6:00 PM

    1.2 million a day flows out of the Corrib pipelines in sales. Ireland and Irish people do not benefit by one cent from these sales, or anything that flows out from Corrib.
    There’s not much hope of anything from this either.

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    Mute P.J. Nolan
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    Nov 24th 2016, 6:33 PM

    @Dave Doyle:
    1.2 million in sales is a totally irrelevant figure unless you know what the costs are

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    Mute Dave Doyle
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    Nov 24th 2016, 8:14 PM

    @P.J. Nolan: Is that the excuse?

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    Mute David Murphey
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    Nov 24th 2016, 3:48 PM

    There’s no oil.

    Hundreds of millions have been spent by multiple companies over the years and they haven’t found one drop.

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    Mute Chris Mansfield
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    Nov 24th 2016, 3:58 PM

    Oil has been found, but the conclusion has always been the same. It’s too expensive to get it out of the ground.

    My understanding was that around $80 a barrel was needed to even breakeven on oil from anything off the South-West and oild is currently priced nowhere near that.

    33
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    Mute Upowthat Burke
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    Nov 24th 2016, 3:52 PM

    It’s all bluff as Atlantic resorces was in the80s. They should give out pinches of salt with the in-house intepitations fabricated by the geologists that work for providence

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    Mute Cian O Donoghue
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    Nov 24th 2016, 3:51 PM

    Is that THE Tony O Reilly?

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    Mute vv7k7Z3c
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    Nov 24th 2016, 4:04 PM

    He’s A Tony O’Reilly…presume you’re talking about the former owner of INM, Waterford Wedgewood, etc who was also a very fine rugby player? This Tony O’Reilly is his son.

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    Mute wolfe tone
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    Nov 24th 2016, 3:36 PM

    excellent news, loads of good jobs

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    Mute Alois Irlmaier
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    Nov 25th 2016, 2:30 AM

    @wolfe tone: For whom?

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    Mute Pat Stapleton
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    Nov 24th 2016, 9:18 PM

    Ray RAMBO Burke sold OUR Oil ,or maybe its Time to Depart the European Onion,and Then Renationalise our Assets.Then put an end to Muslimculturism.

    14
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    Mute David Murphey
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    Nov 24th 2016, 10:00 PM

    There’s no oil. None.

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    Mute Cathal O'Neill
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    Nov 24th 2016, 4:37 PM

    Even if they do find significant reserves, it will very challenging field to develop. The water depth will put it among the deepest in the world. For example the worlds deepest production platform is the Perdido spar which is situated in 2450 m water depth. The exposure to the Atlantic weather won’t help the case. It will certainly require a much higher oil price to make this commercially viable.

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    Mute paul jones
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    Nov 24th 2016, 6:30 PM

    Although I’m a small government kind of person,it is a shame the state couldn’t fund a project like this and fuel the country and export the rest to pay for it.I’m also not a climate change fanatic,but there is an excellent opportunity with wave technology to provide content cheap energy,but they never talk about it.I still think the best thing we could do is build one large nuclear plant to fuel the country.

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    Mute paul jones
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    Nov 24th 2016, 9:23 PM

    @John Bennett: Your absolutely right,I’m a pro private sector fiscal conservative,the government should do as little as possible,look how they ran air Lingus into the ground.Sorry about that I was going a bit mad their for a second

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    Mute Bob Woodward
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    Nov 24th 2016, 6:47 PM

    Nice to see some reasonable commentary about this story.I expected the usual populist theorys on how there is billions of oil off Ireland and we would be the new but the government is in a evil conspiracy to prevent Ireland getting its hands on the oil.The fact that there has never been a viable oil well sunk off Ireland is also a conspiracy

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    Mute Brian Burns
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    Nov 24th 2016, 7:09 PM

    @Bob Woodward:@Bob Woodward:this well in the south west was drilled in the 80′s I think.I got to know a worker on that rig he had nearly 40 yrs experience he told me they had found a major oil field but the Irish won’t be told about it until the time was right .that would include the price or a good deal from the government.

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    Mute paul jones
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    Nov 24th 2016, 9:26 PM

    @Bob Woodward: Off topic for a second,but the real bob Woodward is a hack and Bernstein is a left wing biased Clinton shill.Sorry just had to get that off my chest

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    Mute David Murphey
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    Nov 24th 2016, 9:59 PM

    Brian: yeah, I know a guy who knows a guy who knows a guy……?….

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    Mute Tommy Shannon
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    Nov 25th 2016, 2:06 AM

    Oil believe it when I see it

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    Mute Siobhàn Malone
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    Nov 24th 2016, 9:31 PM

    Wow……this isn’t the first time i’ve heard this company & o’reilly drilling……Steam room anybody?

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    Mute Alois Irlmaier
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    Nov 25th 2016, 2:30 AM

    Might hit Hy-Brasil instead of hitting oil. But who will get all the rights then and all the profits???
    When they remove oil from these wells then what will happen to the ground above these wells then as the sea starts to rise?

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