Europa attracts interest over Irish oil exploration partnerships

Monday 18 February 2013 15.43
Oil companies are showing increased interest in the Irish coast
Oil companies are showing increased interest in the Irish coast

British minnow Europa Oil & Gas, which snapped up two areas off Ireland's coast before big companies came to see the region as a new bright spot for exploration, said it has received partnership interest from oil majors.

Europa, capitalised at just £14 million, began the process needed to find a partner at the end of January to gain help in funding the hunt for oil and gas on the southwest coast.

"We're encouraged by the stature of the companies that are coming in. Household names, if you like," Europa's chief executive Hugh Mackay told Reuters.

He did not name the companies or give details on the nature of any discussions.

With resources tightly controlled by well-endowed countries in the Middle East and elsewhere, oil majors such as BP and Royal Dutch Shell are seeking growth in deeper water and in harsher environments.

Ireland's Atlantic Margin area fits the bill.

After years of fruitless searching, Ireland's oil potential became more promising after positive results from a well in the Celtic Sea.

The Atlantic side offers the real prize, though - fields potentially containing hundreds of millions of barrels, which could transform the country into a significant oil producer.

Exxon Mobil, the world's biggest oil company, will start to drill the Dunquin well off the west coast of Ireland in the first half of this year.

"The geological ingredients here are good. The fiscal terms are fantastic," Mr Mackay said of Ireland's oil hopes.

The Government estimates that the Atlantic Margin could have potential oil and gas reserves of 10 billion barrels of oil equivalent.

Mr Mackay said Europa would not wait to see whether Dunquin strikes oil before signing any deal, but that any positive news would help sentiment.

Given the remoteness, harsh conditions and water depths, geological data collection and the drilling of a well would be too costly for a company the size of Europa to shoulder alone.

A well is likely to cost in the region of $50-$100 million, said Mr Mackay, adding that Europa was not likely to drill until 2015 at the earliest.