Some idea of that potential, or how it is viewed in the industry was given this week by Richard Hubbard, former chief geologist at BP. Commenting in the wake of the Exxon-Mobil deal he said: "Dunquin is a very exciting super-size prospect and definitely one for the big boys.
"I have spent 30 years looking at offshore seismic data and this is a great exploration opportunity. It could put Ireland centre stage." To understand that potential you only have to look at the experience of BP in the North Sea. When the original exploration licences were being carved up the blocks containing the Forties field were reserved for BP, at the time a state controlled multinational. No well had yet been drilled, but the experts were confident that the structure would come in as a giant, which it ultimately did. The reserves at Forties are in the four billion barrel recoverable range and coincidentally Dunquin is thought to have a similar potential for oil. But on top of that the belief is that it could contain gas reserves extending to 25 trillion cubic feet.
It is these figures which have attracted Exxon-Mobil back to explore in Irish waters. In the 1970s and 1980s Exxon, through its then subsidiary Esso, and along with its partner Marathon, spent almost €200m drilling the Irish offshore, including some $100m spent evaluating the Seven Heads prospect in the Celtic Sea.
By the end of the 1980s, however, the group had decided to call it a day, relinquishing its Irish acreage in favour of more prospective oil provinces.
That it has decided to come back is entirely down to the efforts of O'Reilly and Providence. By the late 1990s, interest in the Irish offshore had waned. Despite extremely generous terms, low oil prices meant there were few takers for Irish exploration acreage, a situation which allowed Providence to secure the licence covering the Dunquin prospect.
By committing to work programmes, including drilling and seismic surveys, Providence was able to build an unrivalled position in the Irish offshore. Today its acreage extends from the Irish Sea, through St George's Channel to the Celtic Sea and out into the Atlantic.
And apart from Dunquin, the company is sitting pretty on the Spanish Point discovery, a prospect which it is now touting to the industry as a potential development project.
The Spanish Point discovery was originally made by Philips and Atlantic Resources plc back in the early 1980s, but recent work undertaken by Providence has upgraded reserves significantly - from 1.1 trillion to 1.8 trillion cubic feet of gas - as well as an estimated 288m barrels of associated liquid oil. Given that these reserves are substantially larger than the Corrib field, it can only be a matter of time before one of the major firms comes on board to examine its potential for development.
Over the next couple of years Exxon will first conduct a seismic survey and, provided the results confirm the theory, will follow up with at least two exploration wells.
Beyond that Providence will have to pay its own way on the project, but as O'Reilly says, if it comes to drilling a third well, the dream will have been realised, and his company will have little problem in funding its share of any further costs.
|
