Commercial offshore exploration incentives spur oil firm Petrel to submit drilling applications

OIL company Petrel has renewed its interest in offshore drilling on foot of revised Government incentives for commercial exploration.

Petrel has submitted applications to explore blocks in the Porcupine Basin off Ireland’s west coast. This marks a welcome renewal of interest in Irish exploration for Petrel, a company originally formed in 1982 to explore for oil off the Irish coast.

Following the failure of that original Irish venture, Petrel has enjoyed considerable global success, and currently has operations in Iraq and Ghana. It has just sold 90% of its interest in two Iraqi fields for US$7m (€5m).

The Petrol Affairs Division in the Department of Communications, Energy and Natural Resources has estimated that Irish waters could contain up to 10 billion barrels of oil, worth a potential trillion dollars.

The likelihood is that any oil or gas is located in a series of pockets rather than one giant well. Ireland has only received a handful of applications for rights to explore its 500,000sq km in offshore blocks.

Petrel managing director David Horgan said: “I think there will be Irish discoveries. It only takes one or two hits to transform how a country is perceived, and I like to think of the glass as half full.

“Every year technology improves. The 3D seismic view offers a much clearer picture, we now have the ability to drill in deeper waters, and horizontal drilling has reduced the cost of finding and extracting oil. At $100 a barrel, it is more viable to consider smaller fields than before.”

Petrel chairman John Teeling said the Government’s fiscal terms are very good, title is not an issue and there is a positive State attitude. He noted that Ireland needs to be positive, as drilling results have been poor and exploration costs will be high.

Following a detailed review of newly constructed seismic base maps, together with analysing well log data on over 50 holes, a number of leads were identified. Petrel has submitted applications for blocks in the Porcupine Basin.

Over the years, around 215 wells have been drilled off the coast. Thus far, no commercial oil developments have resulted. However, there have been four major commercial gas finds — at Kinsale, Ballycotton, Seven Heads and Corrib.

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