OFFSHORE EXPLORATION companies face daily bills of up to $600,000 for oil rigs for "years to come", according to one leading industry body.
Petrodata, an agency which provides news and market intelligence on the offshore oil and gas industries, says that demand for rigs is set to outstrip supply over the long term.
According to the agency, rates for rigs capable of working in depths of between 1,000m and 3,000m will remain above $500,000 a day and will peak at $600,000.
The news comes as exploration activity off the Irish coast is set to step up after the Department of Communications, Marine and Natural Resources issued new frontier licences for the Porcupine Basin off the west coast.
Petrodata said that although a substantial number of new rigs were due to come on to the market, demand "will exceed supply and day rates will remain at, or rise slightly higher than, current levels in the longer term".
Activity in the North Sea, where Irish company Tullow has interests, accounts for well over 10 per cent of world demand for rigs.
Providence Resources, in which Sir Anthony O'Reilly and his family have a stake, is involved in three groups which won offshore exploration licences in the latest round.
The winners were a partnership of Providence, Exxon and Sosina Exploration, which received two permits; Providence, Sosina and Challenger Minerals, which got one licence; and Island Oil and Gas and Supernova, which received one licence.
Meanwhile, analysts expect the price of crude oil to fall next week as the US economy slows. A total of 29 of 34 analysts surveyed by the financial news agency Bloomberg said that prices would drop through to March 27th.
