Providence Resources chief executive Alan Linn believes the company's Barryroe oil find could help replace Ireland's dwindling natural gas reserves.
The Kinsale reservoir recently ran out, while the Corrib field, which now supplies much of the fuel used to generate electricity, will be depleted in the middle of the decade.
Speaking at Providence’s agm annual on Monday, Mr Linn said its Barryroe discovery off the south coast contained large quantities of natural gas as well as oil. “If Barryroe is brought on line it will be able to produce gas,” he told the meeting.
Mr Linn said this would benefit the State as it meant "that some of your gas is not coming from Russia or Qatar".
Gas is burned to generate around 60 per cent of the electricity consumed in Ireland, with 700,000 families and employers depending on the fuel. Around two-thirds of Irish gas comes from the Corrib field. The State imports the rest from the North Sea and further afield through a pipe connecting the Irish network with Europe.
Mr Linn said natural gas would guarantee the Irish electricity supply network’s stability as the system took on more renewable-generated power. Asked how the Green Party, now in Government in the Republic, was likely to view this, Mr Linn argued that this position was logical.
"I would be happy to lean in and talk about that logic to the Greens, but I am not saying that they would accept that logic," he said.
Mr Linn stressed that Providence’s immediate priority was to negotiate a partnership to develop Barryroe, which he called Europe’s biggest untapped oil field. The field contains the equivalent of 356 million barrels of oil, but further drilling in the area indicates it may hold further reserves.
Partner
The Providence chief's remarks followed confirmation that the Irish-listed explorer's potential partner, Norway's Spoton Energy, had binding term sheets in place with the six consortium members taking part in the project. The names of the consortium members will be announced separately.
Providence Resources is working with Spoton, a major shareholder in the company, and the consortium’s members to finalise details of a partnership to develop Barryroe, known as a “farmout” in oil industry jargon.
The Irish company said the consortium comprises industry service and supply businesses with “excellent technical and operational credentials, and extensive experience undertaking projects similar in nature to the Barryroe oil and gas field”.
Providence's previous bid to farm out Barryroe to a Chinese partner, Apac, failed when that company failed to put up cash as agreed by a deadline last year.
Mr Linn, who became Providence chief executive in January, stressed that a deal had not yet been done. He told shareholders that Spoton and its partners had the right credentials to develop Barryroe.
“They are not a bunch of finance guys; they are actually oil and gas professionals,” Mr Linn said.
He added that each of them had 30 years or more experience in the industry.
Mr Linn succeeded Tony O’Reilly junior at Providence. All of the shareholders who voted on Monday endorsed the new chief executive’s election as director of the exploration company. The meeting passed all resolutions.
