UK oil and gas firm closing in on development partner for Irish licences

UK oil and gas firm closing in on development partner for Irish licences

British exploration company Europa Oil and Gas is expecting to finalise a development partner for the bulk of its Irish offshore licences in the coming months, enabling drilling work to begin sometime next year.

Ireland is a key region for Europa, with the company sitting on around five billion barrels of oil and 2.5 trillion cubic feet of gas in six offshore licences here.

Its pending partnership deal includes investment in Europa's flagship Irish asset, the Inishkea gas project adjacent to the Corrib field. Europa has said Inishkea could significantly reduce Ireland's reliance on gas imports after Corrib comes to the end of its life in little over a decade.

Europa tentatively agreed so-called farm-out terms with an unnamed major international oil and gas company at the start of the year and has since been waiting for that company to make a final investment decision. Europa said other parties remain interested also.

The company will sell down 20%-30% of its interests in the assets.

In its half-year results presentation, last month, Europa suggested the political environment in Ireland - particularly People Before Profit's bill aimed at banning offshore drilling for oil and gas in Irish waters - may be causing potential investors to slow down their investment decisions.

Europa's chief executive Hugh Mackay this week said that doesn't necessarily equate to the company's current experiences. He said Europa is confident of agreeing it farm-in deal "sooner rather than later".

Europa will also, at a later stage, look to sell part of its interests in a licence close to the Iolar prospect off the south-west coast, which is due to be drilled in the coming months by China-owned group CNOOC-Nexen.

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