Providence clinches €139m deal to start developing Barryroe field in late 2022

Providence Resources has finally clinched a long-anticipated deal that it says will see the start of the development of the Barryroe oil field 50km off the south coast, in late 2022.
Providence clinches €139m deal to start developing Barryroe field in late 2022

Pictured is a rig at the Barryroe oil field in the early years of the development in 2012. File picture: Finbarr O'Rourke

Providence Resources has finally clinched a long-anticipated deal that it says will see the start of the development of the Barryroe oil field 50km off the south coast, in late 2022.

Under the so-called farm-out deal, the company said a group of Norwegian-led developers, SpotOn, will pay "a minimum" of $166m (€139m) to develop Barryroe in return for half of the field's future production.

SpotOn is the same group that had to delay its plans to do a deal following the global disruption caused by the Covid-19 crisis earlier this year. 

And last year, Providence had to start over again after funding from the Chinese consortium APEC Energy continuously failed to turn up.  

Under the new deal, SpotOn will get warrants for 60 million Providence shares at 17 cent each when the first oil starts flowing, which may be in 2023 or 2024. 

The shares traded in Dublin to reflect those terms. 

Following the Government's ban, Barryroe will be one of the last Irish fields to be developed.         

Providence said the SpotOn group had the "experience and expertise" to develop Barryroe, starting in late 2022. 

"Over the coming months, we will be working with the SpotOn team to complete the transaction; finalise the project schedule; progress the Government approvals and develop the detailed drilling and facilities work programmes," said Providence chief executive Alan Linn.   

The deal "is conditional upon SpotOn confirming that a minimum of $166m in funding . . . for the early development programme is in place and that Irish Government approval" is agreed, the company said.

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