Providence hopeful of oil discovery off southwest coast

Irish-based exploration company Providence Resources has received new data that suggests a site off the southwest coast may yield oil.

The company, which is headed up by Tony O’Reilly jnr, last month said there was renewed international interest in Dunquin South, a 25,000sq km area of the Republic’s territorial waters west of Barryroe, off the Kerry coast.

Providence technical director John O’Sullivan told a shareholder meeting that Providence and several multinational oil companies, including Italy’s ENI and Spain’s Repsol, this year produced reports on the prospects of getting oil from Dunquin.

“We can clearly see that Dunquin South is back on the radar and is something we believe could be a world-class prospect,” he said.

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Providence holds 26.85 per cent of an exploration licence in Dunquin South. Eni, Repsol and British company Sosina Exploration are the other shareholders.

Exxon drilled a single exploration well in the adjoining Dunquin North five years ago, but abandoned it after the oil there was deemed not to be commercial. At the time, there was significant international interest in the Porcupine Basin, of which Dunquin is a part.

Mr O’Reilly explained that further work by Providence discovered a 1 km-wide “bullet hole” in the bedrock in Dunquin North through which the company believes made the oil “water wet” and so of no value to the company.

Providence issued a “technical update” on the project on Friday, in which it said it had received 3D seismic data which has confirmed no such feature is evident over the Dunquin South prospect.

Imaging of the underlying 700sq km Dunquin Ridge has also been “greatly enhanced”, indicating the ridge to be of sedimentary origin.

Speaking on Friday, Mr O’Sullivan said the development was “highly encouraging” for the prospects of the area.

“The presence of a major chimney over Dunquin North has been identified as the main reason for prospect failure,” he said.

“It is obviously highly encouraging that no such feature has been identified over Dunquin South, which we believe substantially de-risks this exciting exploration prospect.

“In addition, the data are suggesting a sedimentary versus volcanic origin for the erstwhile enigmatic Dunquin Ridge, which itself may provide another very significant stacked exploration target for a future Dunquin South well.”