Providence puts drill plan on hold

Providence Resources has scrapped immediate plans to drill off Dublin’s coast.

The exploration company was awarded a foreshore licence for its Dalkey Island prospect in the Kish Bank Basin in October; a move which gave it the green-light to undertake exploratory drilling in the first quarter of this year.

However, the company yesterday surrendered that licence, citing a “lack of clarity” regarding the permission granted, which it said could have resulted in legal challenges against it and “undue delays” in its work.

Providence said it had become clear that certain elements of the EU’s Environmental Impact Assessment Directive were not transposed correctly into Irish law by the government in 1999. The company will now wait on the current Government to amend planning and environment regulations, bringing the Irish regulatory framework into line with the directive before reapplying for a foreshore licence.

Tony O’Reilly Jr called the situation “frustrating”, but said Providence’s reaction was “in the best interests for all concerned”.

“Despite the delay to the planned drilling activities, we remain very excited about the potential of this exploration prospect,” said Mr O’Reilly.

In other exploration news, Tullow Oil’s share price rose by nearly 1% in London, despite the company, which publishes annual results today, backing up previous claims of disappointing drilling results by partner firm Kosmos Energy. Tullow owns 50% of the Sapele prospect in Ghana, where drilling has encountered water in its primary target.

Elsewhere, Dragon Oil, the Middle-Eastern exploration firm with a share listing in Dublin, yesterday reported annual operating profits of $791m (€588m) on flat revenues of $1.15bn. However, Dragon has forecast 10%-12% production growth for this year, rising to 15% next year, and will issue a full-year dividend of 30c for the past year, representing a 50% annual increase.