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Offshore licences ‘will boost Irish oil deals’

Geoff Percival - Irish Examiner

British exploration firm Europa Oil and Gas is hopeful of landing a development partner for licences it holds off the Irish coast before the end of the year.

The company was yesterday awarded four more licensing options, in three basins, in the final tranche of awards from the Government’s recent Atlantic Margin Licensing Round. It means the company now has seven licences in Irish waters.

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In January, Europa opened the data room on the two licences (with prospective resources of more than 1.5bn barrels of oil equivalent) it already held off the south-west coast prior to the latest licensing round.

It now hopes to agree a farmout deal for those licences (it will look at farming out its new licences at a later date) before the end of the year, with drilling work expected to start during 2018, although next year hasn’t totally been ruled out.

Around 50 major and mid-cap explorers have passed through Europa’s Irish ‘data room’ and around 12 are understood to be seriously interested. Chief executive Hugh Mackay said Europa now has a leading position in Ireland’s Atlantic basins, which he added have now emerged as “a global exploration hotspot”.

“Europa was one of the pioneer companies who have played a role in reactivating industry interest in Atlantic Ireland and we feel that the entry of majors and super-majors is providing a validation of our belief in Ireland’s exploration potential,” said Mr Mackay, adding that the latest wins could speed up the company’s existing farmout plans.

Earlier this year he said more consolidation in the market could be seen when firms’ full Irish acreages are known.

In all, 14 new licensing options were awarded yesterday to nine bidders in the second round of awards; taking the number to 28 options. Minister of state for natural resources Seán Kyne said that, at a time of very low oil prices, the strong interest shown in the latest licensing round is “very positive”.

“Industry’s response to the round demonstrates the perceived positive prospectivity of Ireland’s offshore and highlights confidence in the Irish regulatory process and the ability of industry to do business in Ireland,” said Mr Kyne.

“The response [to the round] is by far the largest number of applications received in any licensing round held in the Irish offshore.”

Pat Shannon, chairman of the Irish Offshore Operators’ Association called the awards “a significant and positive development in Ireland’s energy landscape, which has the potential to deliver real benefits for Irish energy security and supply”.

“This is positive news and demonstrates that there is very strong interest in exploring the potential of the Irish offshore,” he said.

While the first tranche of licence awards, in February, saw big players such as ExxonMobil, Statoil, Eni, BP, and Woodside take Irish acreage, the second round focused on awards to smaller firms such as AzEire, Capricorn, Faroe Petroleum, Ratio Petroleum, and Predator Oil and Gas.

John Teeling’s Petrel Resources and the Tony O’Reilly Jr-led Providence Resources were also among the winners.

Petrel director David Horgan said the interest shown validates his company’s belief that the Porcupine Basin, in particular, is under-explored and has reserve potential. He said Petrel will be seeking to further develop its acreage presence in the Porcupine Basin.

Elsewhere, BP has agreed to pay $175m (€154m) to shareholders who brought a class-action lawsuit that accused the oil company of misleading them by understating the severity of the 2010 oil spill in the Gulf of Mexico. BP said the claims will be paid during 2016-2017.

However, the company said this settlement does not resolve other securities-related litigation in connection with the spill.

In 2014, US District Judge Keith Ellison in Houston said investors who bought BP’s American depositary shares soon after the explosion could pursue claims as a group that BP publicly ‘lowballed’ the oil flow rate, and that the share price “did not reflect the magnitude of the disaster facing the company”.

Posted Date: 
5 June 2016