Providence planning Celtic Sea crude by 2013

PROVIDENCE Resources, a Dublin-based energy explorer, may bring Celtic Sea crude ashore by 2013 as it seeks to make the first profitable Irish oilfield, said chief executive Tony O’Reilly.

“We’re interested in trying to get as quickly to commercialising flowing oil as we can” at the Barryroe field, Mr O’Reilly said yesterday in a telephone interview. “There are various development scenarios that would be considered by the partnership, but you could look at fast-track late 2013, 2014.”

Providence, which has the biggest stake in offshore Irish exploration licences, will begin drilling an appraisal well next month at Barryroe off the southern coast. While it has enough funds for the exploration programme, bringing oil ashore will require extra cash, Mr O’Reilly said.

“We’d look to access that capital from farm-downs and future partner investments,” he said. Providence has 23 interests in permits off Ireland, after winning more in a licensing round earlier this month.

The multi-well drilling programme will include projects in six geological basins off Ireland from 2011 to 2013. It has a 50% stake in the Barryroe licence, with San Leon Energy and Lansdowne Oil & Gas Plc holding the rest. No final development decision on the field has been made, Mr O’Reilly said.

Several of Providence’s Irish discoveries are “close to commerciality,” Andrew Whittock and Rob Mundy, analysts at Liberum Capital, said on October 18 after the company won further exploration licences a day earlier.

Its development potential is being “overlooked” by investors, according to Liberum, which recommends buying stock at a 650-pence target price.

“By flowing oil in offshore Ireland, which is our intention, we think that will lead to a complete reappraisal of offshore Ireland,” Mr O’Reilly said. “The environment is right, pricing is right, the fiscal regime is attractive, and the technology is in place.”

Providence and its partners won four of 13 licenses in the licensing round this month as the country seeks to spur exploration. Spain’s Repsol YPF SA got a 40% stake in a permit to explore the Goban Spur Basin off the south coast in a partnership with Providence and Sosina Exploration Ltd.

“This isn’t an easy game; there are lots of risks associated with it, so obviously the more players, the more wells will be drilled,” Mr O’Reilly said.