" Ireland is set for offshore oil rush; Massive licence auction could threaten North Sea"

OGJ:

IRELAND is poised for a massive auction of off-shore exploration rights as the country's biggest ever drilling programme kicks off.

The emergence of a thriving oil province off the coast of Ireland could lure operators away from the North Sea where they have been hit with a new windfall tax. A major oil find would also help Ireland recover from its financial crisis.

Dublin is preparing to issue a new round of exploration licences for a vast swathe of the Atlantic margins to the West of Ireland. Up for grabs are 996 full blocks and 58 part blocks, over an area of about 252,500 sq km. The licensing round kicks off at the end of May and is expected to attract international interest.

Resources yet to be discovered could top 10 billion barrels of oil equivalent, experts say.

Providence Resources, listed in Dublin and London, is about to embark on a $500 million (£306 million) offshore drilling programme, the biggest in Ireland's history.

Chief executive Tony O'Reilly Jr, the son of the Irish billionaire of the same name, said: "It is the last, great, unexplored frontier. In five years, there will be an oil industry in Ireland."

He added: "I expect the tax changes in the UK to drive a little more interest [in offshore Ireland]. If the UK doesn't water down the proposals it will drive more people to Ireland."

Providence, 20 per cent of which is owned by the O'Reilly family, plans to drill 10 wells across six basins between this summer and 2013, with heavyweight partners that include America's ExxonMobil.

The oil minnow will explore in the Celtic Sea off the southeast coast, off Dublin, off Northern Ireland and off Ireland's west coast in deep water.

High oil prices, improved infrastructure, and enhanced technology will allow Providence to look again at prospects previously regarded as not commercially viable.

The first test for the explorer will come later this summer when it re-enters Barryroe, a Seventies' oil discovery in the Celtic Sea.

Its Dalkey Island prospect, not far from Dublin, is similar in profile to Britain's oil-rich Morecambe Bay.

The potential discovery that has attracted the most interest is Dunquin, off the west coast, in which ExxonMobil and Italy's Eni hold 80 per cent.

A big find could also help revive the Celtic Tiger by bringing inward investment into the debt-laden country, as well as hefty tax revenues. O'Reilly said: "Look at how Aberdeen has exploded."