Next 5 years ‘key’ for Irish offshore exploration sector

The next five years is a make or break period for Ireland’s burgeoning offshore exploration sector, an industry analyst said yesterday.

In a report on the sector, Davy Stockbrokers’ Job Langbroek said that development of the Celtic Sea and Atlantic Margin areas will ultimately show if the industry has a viable future.

“Notwithstanding the presence of four discovered gas fields, the single biggest factor offshore Ireland is that no oil field has produced, or is producing, oil.

“This has denied the sector of a catalyst to attract industry attention,” he said.

“It is difficult not to conclude that the next five years, or so, will determine the outcome of the Irish offshore. The farm-out and development of [Providence Resource assets] Spanish Point and Barryroe will be the biggest actors in the short-term to ensure success.

“In the longer-term, the Atlantic Margin has one more substantial pulse of drilling activity, probably towards the end of the decade. From where we stand now, these events will determine how the history of the Irish offshore is ultimately written,” said Mr Langbroek.

Elsewhere, there was good news for Irish mining and exploration firms focused overseas. Tullow Oil’s shares hit a nine-month high after the company, which has debts of $4.5bn, agreed extended borrowing facilities with its lenders.

The deal gives Tullow further financial support in the current low oil price environment. It will have access to $800m in extra funding and a further $200m if needed.

Chief executive Aidan Heavey told shareholders at Tullow’s AGM in London, yesterday, the deal “demonstrates the continued strong support of our leading banks and is an important sign of confidence in Tullow’s excellent asset portfolio.”

Meanwhile, mining firm Kenmare Resources has announced plans to raise $275m (€242m) in funding to be largely used to dent its near $320m debt. The company operates the Moma Titanium mine in Mozambique.

Virgin Islands-based chemicals trading firm King Ally Holdings is set to take a maximum 29.9% stake in Kenmare for a $100m investment. An investment of the same size is due to come from Oman’s sovereign wealth fund, while $75m is targeted via an open offer for existing and new shareholders.