AN Irish exploration company plans to start drilling an oil and gas well 200km off the West Clare coast next summer. It estimates net value, based on current prices, at between US$1billion and US$2b.
Providence Resources Plc has been awarded licensing options in four new offshore areas as part of the 2011 Irish Atlantic Margin Licensing Round, including its Spanish Point gas condensate, by Natural Resources Minister Pat Rabbitte.
These licensing options have a two-year term after which they may be converted into Frontier Exploration Licences, which have a 15-year term, divided into a first phase of three years, followed by three phases of four years each, with a well commitment required at the end of the first phase.
Providence will operate the licensing options in all four areas which cover around 5,000km2 and range in water depth from about 400m to 3,000m.
Their partners in the new acreage include existing co-venturers like Chrysaor and Sosina, as well as new entrants, such as Repsol and FirstOil.
The company is planning to start drilling in the area in summer 2012. Discoverd in 1981, the site has a total projected volume of 200 million barrels of oil during its lifetime.
Drilling off-shore is expensive with the cost of extracting oil from one well expected to range between US$50 and US$60 million.
Senergy, a leading Aberdeen-headquartered energy services company, has carried out a competent persons report (CPR) on the resource potential of the Spanish Point and Burren discoveries.
The CPR evaluated the resource potential at Spanish Point and has attributed gross contingent resources that are in line with the previously reported volumes of up to 200 million barrels of oil.
The sub-surface evaluation of wells off the west coast has been based on 2D seismic information together with the integration of mapping into the overall Spanish Point regional model. This work has revealed the presence of a number of new prospective features.
The company completed a new 220km2 3D survey over its wells and integrated this information with the 2009 Spanish Point 3D survey.
It is committed to starting another 1,500km2 3D survey in the basin where some oil was previously found in wells and will provide a very large area for the discovery of oil and gas.
Providence technical director, John O’Sullivan revealed the company got very good quality data from the use of a new state-of-the-art seismic vessel during its most recent surveys over just 10 days because of weather, which is considered a very short period of time for this type of detailed work.
Mr O’Sullivan confirmed it would take a few months before all of this technical data is processed and analysed by experts.
He predicted there would be a significant increase in commercial traffic in Shannon Airport, which would be used as a base for helicopters and the transport of equipment to and from the site.
Foynes Port will also see an increase in business as it facilitates the transport of goods and services for the off-shore drilling.
Cork Airport has benefited significantly from drilling taking place off the South-West coast in the Celtic Sea.
A wide range of ancillary support services will have to be readily available once drilling starts.
Mr O’Sullivan explained the oil and gas would be brought from the Spanish Point wells into the Shannon Estuary, with the gas released into the Irish national network at Limerick.
Oil will also have to be transported to the Whitegate refinery in Cork, the only depot in Ireland, or to a refinery in the United Kingdom or Europe.