Serica discovers oil off Irish coast

A LONDON-based exploration company has made what it claims to be the first oil discovery off the west coast of Ireland for the best part of three decades.

Serica Energy – which is listed on London’s Alternative Investment Market (AIM) – announced yesterday that it has made an initial oil discovery as part of early exploration work, ironically for gas, on three blocks it part owns off the west coast, near Co Mayo.

Serica won the Irish Petroleum Exploration Licence FEL 1/06 – which comprises of three blocks – in the Slyne Basin, off the Mayo coast in early 2006. It co-owns the licence – on a 50/50 basis – with German exploration company, RWE Dea AG.

According to Serica’s chief executive Paul Ellis it is too early to say how much oil exists at the site, but it is the first significant find off the west coast since the early 1980s.

The company said considerable technical work still needs to be undertaken.

“These are very early days and there remains a lot of work to be done before full drilling begins and the full commercial potential of the discovery and the rest of the licence can be established, but we’d hope that more oil prospects exist within the licence area than the four we’ve found already. This could mark the beginning of an exciting phase of Irish exploration,” Mr Ellis said yesterday.

Serica is now likely to complete further seismic studies at the site over the next few months with a view to commence actual full drilling next summer.

The Slyne Basin licence is currently Serica’s only asset in Irish waters, but it is open to acquiring more.

It is expecting results of the latest Irish licensing round – for blocks in the Rockall Basin, for which it applied back in April – to be announced later this month.

Meanwhile, Irish exploration company Petroceltic has brought forward exploration work in its Tunisia-based interests to next year after reaching a farm-out agreement to fund a multi-well drilling programme there with the Hong Kong-listed exploration specialist PetroAsian Energy Holdings.

PetroAsian will invest up to $14.5m (€10.3m) in the Tunisian operations and will gain a 51% interest in the permit. Petroceltic will, however, remain as operator of the permit.