Oil explorer Providence looks to renewables

Providence Resources, the exploration company run by Tony O'Reilly jnr, is considering a strategic pivot into the renewable energy sector.

Providence is close to completing a farm-down deal to bring a Chinese investor onboard for what may be Ireland’s first ever commercial oilfield, at Barryroe off the south coast.

The company’s board, however, is currently examining whether it may be viable for it to enter the green energy space, possibly in partnership with larger multinational energy groups.

“We’ve been quietly looking,” said Mr O’Reilly. “It behoves us to constantly look at new opportunities – both in the oil and gas space, but also renewables.”

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He said the company was examining whether its expertise as an offshore operator could be deployed to help larger partners with renewable projects off the Irish coast, implying it may hold an interest in offshore wind farms.

“[But] it doesn’t necessarily mean we do wind. It may be geothermal. Who knows what it might be. But we’re open to it. That’s the way the industry is going,” said Mr O’Reilly. “You’ve got to be cognisant of where the world is heading. There will be an increasing drive for renewable energy.”

He maintained there are still challenges in making renewable energy a cost-effective method of generating power, and returns for shareholders.

“Technology is driving costs down in the renewable space. Look at photovoltaic, look at wind. But there is still more to do.

“But I’ll be brutally honest: there’s a lot of waffle that goes on about the true cost benefits of renewables. We’re trying to understand if there are economic returns that can be generated for shareholders.”

He said he would not bring Providence into the renewables space “just because other people think it is the right space”.

“My job is to create value for shareholders,” he said.

Mr O’Reilly warned that the indigenous oil and gas industry should not be excluded from the conversation about Ireland’s future energy needs. He said moves by the Government to bring in climate change laws that could limit oil and gas exploration in this State could be counterproductive.

“Increased importation of fossil fuels will lead to increased prices, trade imbalance, loss of potential exchequer revenue and a rise in CO2 emissions, as the required oil and gas will have to transported to Ireland [from abroad],” he warned.