Our member companies are the leaders not only in developing new technologies that would allow us to repeat the success of the Kinsale and Corrib gas fields, but also in developing offshore windfarms, solar, hydrogen and geothermal power, as well as harnessing the power of waves and capturing CO2 emissions.
Many have come to me and asked what is going on in Ireland? The contrast between the approach of Scotland and here was often mentioned. Companies that are being actively encouraged by the Scottish government to develop wind, wave and solar alongside a well-established oil and gas exploration sector feel frustrated here. Scotland knows energy companies plan decades ahead, not months or years, and it is working towards a future when renewables will largely replace oil and then gas.
What made the situation even more difficult to fathom is that our politicians embarked on this course knowing that post-Brexit we will be vulnerable when it comes to energy. Without another offshore gas field like Kinsale or Corrib, we will be reliant on imports via Britain.
Not only is this a strategic risk, relying on a country which itself has only the capacity to store eight days' supply of gas, but it also does not make sense in terms of climate action. The UK has to import supplies from Qatar and Russia, generating a much higher carbon footprint.
The Government has finally made clear that it is policy to support and encourage gas exploration. It has again acknowledged the importance of natural gas as a transition fuel and its key role as we move towards a zero-carbon economy.
The policy paper brings us in line with other European countries and those further afield who recognise that natural gas gives us that bridge and allows us to have power to sustain and create jobs while also meeting our climate obligations.
It will provide a clear commitment that Ireland is open for business to develop the energy potential of our offshore.
For more than four decades, natural gas from Kinsale Head and Corrib has kept us safe from a repetition of the energy shortages, rationing and long queues resulting from the 1973 oil crisis. However, both fields are now in decline, with Kinsale Head due to cease production in 2020.
It is time to return to the frontier and harness new technology and ensure Ireland becomes a leader in developing and implementing new energy solutions involving all sectors of the energy industry.
Mandy Johnston is CEO of the Irish Offshore Operators' Association
There is a opinion piece in today's Irish Independent from Mandy Johnson, the CEO of the Irish Offshore Operators Association:
Not long before Christmas, the Government quietly placed online a policy paper the significance of which will be with us for decades to come. The paper on offshore exploration may seem of niche interest - but in reality it affects us all.
The new policy represents a vital sea-change for a sector hit by two years of political uncertainty and regulatory delay, but alas it may all be too late to restore the confidence in the Irish investor landscape. There may be a degree of political shyness about publicising a new pro-active approach to offshore natural gas.
But this rethink by Government is badly needed if as a country we are to continue to have enough power to keep the lights on and the economy vibrant.
It also moves to reassure companies that all existing exploration licences, both oil and gas, will continue through all stages.
In another significant move, the regulation of the sector is to be moved out of politics and over to An Bord Pleanála. This is in line with our calls as a representative association for politicians to stop playing football with something that is far more important than the next election.
The sector is now considering the paper in full. We will need to see that Government is serious about delivering the commitments which it has set out. There will have to be timelines and deadlines. In the new year, we need to see an end to uncertainty. The saga surrounding offshore exploration has shown the dangers of gesture politics to Ireland's reputation as a good place in which to invest and create jobs and do business.
Lessons should be learned from what has happened. Part of that reflection must be consideration of the messages we want to send as a country to investors, both national and international, committed to pushing new boundaries, developing new technologies and willing to take a leap of faith in order to ensure a better future.
When it comes to pharmaceuticals, IT and social media, we have been at the forefront. Those companies discovering new medicines and cures have found a welcoming home in Cork and elsewhere; the biggest names in social media have made Dublin the Silicon Valley of Europe, while the Intel success story in Kildare is the envy of the world. It is unfortunate that the experience of the energy sector has been very different in recent times.
Political and regulatory obstacles sent out a message that companies that are world leaders in meeting the challenge of keeping the lights on while protecting the planet found Ireland one of the most challenging places in which to do business. If this happened by design, it is an unfortunate indication that the powers-that-be do not accept our energy security vulnerability; if it happened by default, it is an unforgivable dereliction of duty that could compromise our environmental protection and our economic progress
Hopefully Providence can get a deal Longwait. There will a election in February. When the next government is elected they can afford to be more pragmatic when it comes to energy security and revenue that can come from offshore drilling
Article in today's Irish Independent about Irish oil companies: Here are the bit relating to Providence:
Last year had been a significant 12 months for the company, with the agreement of the Barryroe Farm-Out with Apec, a Chinese consortium, being the most noteworthy event.
Under the agreement, the Chinese group was to have a 50pc interest in Barryroe - which has a predicted 311 million barrels of recoverable oil - in exchange for it covering half of the estimated $200m (€181m) in costs that were associated with the drilling programme.
Funding of $9m from the Chinese group was due to arrive in June.
However, after multiple delays, the Irish oil and exploration company - whose roots go back to 1981 when its predecessor business, Atlantic Resources, was formed by a group of investors led by Anthony O'Reilly - in October said it was ending its exclusive relationship with the Chinese backer, with the funds having failed to materialise.
A month earlier, it had tapped shareholders for $3.76m, to help cover the cost of redundancies and keep the lights on a while longer, and with it the fading dream of an Irish gusher.
Earlier this month, Tony O'Reilly Jnr resigned from the group.
A search for a new CEO is under way. But Providence has no day-to-day business and almost no employees.
It has assets, primarily its Barryroe prospect, off the Irish coast, where oil has been identified at a number of wells, but lacks the capital to exploit the finds.
Its share price has tumbled by more than 70pc since the start of the year.
Mr Langbroek said he would be "surprised" if Providence did not manage to get a CEO and a new partner.
"From what we know, Barryroe is a great project and all things being equal, it should still be developed," he said.
"The deal they had with the Chinese was a wonderful deal. It is a very viable project.
"It still needs to be appraised and that is the key; it needs a definable commercial plan.
"But you probably won't be able to develop that plan until you drill at least one, if not two, more wells."
Hopefully we will have a Chinese New year in 2020.
A very encouraging statement from the government Manyana, and gives the green light for barryroe if someone wants to develop it. As you say, we will have to wait for Brid Smith's bill, but I imagine that since the government would have to pay for lose revenues if offshore licences were withdrawn, ( The very definition of the money message) that particular bill should be fine. As mentioned there will be a general election as soon as February next year, and either Fine Gael or Fianna Fail will be in government. There is really very little difference between both parties, and they both can be relied on to keep this bill.
I agree Manyana. There needs to be certainty around the licencing issue from the Government and the Brid Smith court challenge will have to run its course as well. Hopefully it will be resolved in early January next year. You make a very good point about Exola, and having the ability to sell it separately is useful. I would hope that the Chinese take a interest in Providence, as any Irish government would not mess around with their drilling campaign.
I agree 99icecream. Whatever people may think about APEC, they did go through the progress of taking a stake in Barryroe. Both APEC and CNOOC,( or as I like to call them the Chinese Government), have full data on Barryroe and the Porcupine basin, and taking over Providence gives the Chinese Government drilling rights to The Celtic Sea Basin, The Kish Bank Basin and the Porcupine Basin. The Government have given licences for Oil drilling in all these areas, and none of them have being rescinded.
The bottom line is that Providence will be allowed to drill for oil in Barryroe by the government. The government has given them the licence to do so and has just stated that it is valid and will not be rescinded. Politically it is a good move by the government and for Providence they can drill (if they get the funding) in relative peace. The court ruling on the money message in relation to offshore drilling and 49 other bills is due today
Regardless of what governments and their electorates might wish for, getting rid of oil and gas completely will prove easier said than done. This will be particularly true of developing countries. "Saying you are going to stop taking energy from the carbon compound is one thing. Actually doing it is another. By 2050, half of all energy will still come from oil and gas. We don't have the replacement systems in place yet," says the analyst. "Oil and gas may be a sunset industry, but it's going to be a very long sunset."
There are certainly straws in the wind, if one will pardon the pun. In the third quarter of this year, renewable energy, mainly wind, contributed a record 40pc of UK electricity. The National Grid is now forecasting that non-carbon electricity, wind and nuclear, will overtake gas and coal-fired electricity for the first time ever in 2019.
Globally, the tide has already turned against coal. Wind power is now cheaper than coal-fired power in many markets, including the US, where an estimated 74pc of coal-fired plants are more expensive than wind or solar.
In this country, the ESB has announced that its two peat-fired generating stations will be closing by the middle of next year while, last month, the European Investment Bank revealed that it would no longer provide funding for new fossil-fuelled projects after the end of 2021.
However, while coal and peat look set to rapidly die out, other hydrocarbons, particularly gas, may prove more resilient. The Government made great play of apparently banning new exploration for oil in Irish waters last September.
However, on closer examination, there was less to the ban than met the eye. Not only was natural gas excluded from the ban, with Taoiseach Leo Varadkar justifying the exclusion on the grounds that gas was a "transitional" fuel on the road to decarbonisation, but the entire Celtic Sea was excluded.
Despite these exclusions, even a partial exploration ban in Irish waters will have a major impact. The Government's ban was at least partially triggered by the Climate Emergency Bill, which would have banned the issue of new oil and gas exploration licences, introduced by People Before Profit TD Brid Smith. Although the Government slapped a money message on the bill earlier this year, the Dáil support it had already gathered meant last September's ban was probably the least it could get away with doing.
Although the exploration ban doesn't apply to gas, in practice oil and gas co-exist in many discoveries. This means that even an oil exploration ban will deter many companies from drilling in Irish waters. "Globally, oil and gas is a challenged business," says one Dublin analyst. "The type of investment in the sector will change. In the absence of a really high oil price, the public markets are struggling with the concept of oil and gas."
There is no sign of that happening any time soon. Crude oil prices have yet to recover from their 2014 collapse, with shale oil effectively capping prices at $60 (€54) to $70 a barrel.
Meanwhile, the FTSE 350 index of London-quoted oil and shares has fallen by 9pc over the past year, while the Environmental and Renewables index rose by 25pc.
Last piece of the article above.
A article in today's Irish Independent
Dan White
December 15 2019 7:00 AM
On December 6, Providence Resources announced the resignation of long-standing chief executive Tony O'Reilly Jnr. Then, last Monday, Tullow Oil announced that its CEO Paul McDade was also leaving "with immediate effect".
While the announcement from Providence was not entirely unexpected, the news from Tullow came like a bolt out of the blue, with the share price tumbling 70pc. Providence has, in one guise or another, been drilling for oil and gas in offshore Irish waters for almost 40 years.
In 2008, it seemed as if these efforts would finally be rewarded when oil was discovered in its Barryroe field off the coast of Co Cork. These hopes were strengthened four years later when, after further drilling, Providence said Barryroe could contain up to 1.8 billion barrels of oil.
After more than three decades of trying, it appeared the search for oil in Irish waters was finally about to be crowned with success. What could possibly go wrong? Quite a lot actually. Despite it apparently containing as much oil as a significant North Sea field, Providence has so far found it impossible to secure a partner to help it develop Barryroe. The latest attempt collapsed ignominiously in October, when Providence scrapped a deal with Chinese firm APEC.
The Providence share price, which peaked at £6.65 (€7.95) in September 2012, was trading at just 3.3p last week, while its market value has shrunk to just £22m from £425m.
Tullow's fall from grace has been even more spectacular. Under former CEO Aidan Heavey, it grew to be one of the largest independent oil companies in Europe, with operations in Ghana and Uganda. Unlike most Irish oil companies, it successfully made the transition from exploration to production, with daily production levels hitting almost 90,000 barrels a day.
Its share price peaked at over £13 in February 2012, valuing the whole of Tullow at almost £12bn. Since then, it's been downhill. Even before last week's news, the Tullow share price had fallen by almost 90pc to £1.40. It now stands at just 60p, valuing the entire company at a mere £640m.
Tullow's latest difficulties stem from problems from its Jubilee field in Ghana, which will result in production falling to between 70,000 and 80,000 barrels a day next year, and to 70,000 barrels from 2021 onwards. However, as the fall in the share price since 2012 demonstrates, Tullow's problems go much deeper than those revealed in last week's announcement.
Are the problems at Providence and Tullow company-specific events, or are we witnessing something more significant, as investors become more wary of oil and gas companies amid increased concerns about climate change. The rest of the article is posted above.
In a corporate update on the 1st of October Providence have stated that they will commence with the licence reversion process of APEC's 50% working interest in Barryroe. I suppose there should be a RNS realised when this process is finished. As you say Manyana, it is very curious
Sorry that is the wrong link.
I would not be able to work out if the percentages for Providence or Lansdowne have being changed from the DCCAE site:
http://gis.dcenr.gov.ie/internetIPAS/servlet/internet/IPAS2IAuthorisationSearchResults
The case brought by People before Profit to challenge 50 bills that have being stopped by the Government because of the money message ( The Government says that passing any of these bills would cost the exchequer money), will be up for decision by the courts next Tuesday. Banning offshore drilling is one of these bills that has a money message attached. The Government has made the point that they would be legally required to compensate oil and gas companies for lost revenues if they withdrew these licences. Hopefully the courts will rule in favour of the Government, and it would be a good time for the Government to give some surety to companies like Providence regarding the existing licences for oil exploration offshore Ireland.
Just a small bit on the Proactive investors site this morning:
Tullow Oil and Providence Resources both have their roots in Dublin, and whilst their respective scale, profile and stature are quite different they have something else in common …
Both firms have ‘lost’ their long-standing chief executives in recent days.
Something else they had in common, until today, was Angus McCoss.
Tullow’s now departed exploration director was one of only two remaining board members at Providence following the resignation of Tony O’Reilly on Friday.
Providence is very much at a crossroads. It has a substantial undeveloped oil field with a currently uncertain future following recent problems getting Chinese funding to completion.
The AIM-quoted Irish firm has just launched a process to identify and recruit new leadership for “its next phase of development” – if only the company knew of any out-of-work executives with proven track records delivering discoveries into development and subsequently production.
Now, this is arguably the laziest of lazy speculation – and we certainly couldn’t claim a recruiter’s fee for the suggestion – but, one could imagine that Providence chair Pat Plunkett may check the availability of his non-executive director.
Really, though, the only concrete thing to say here is the next appointments at Tullow and Providence will be decisive in the future of the two very different companies.
The main focus is Barryroe, and with the government giving the green light for gas exploration, Providence could make the case that they will be looking for gas to refill the Kinsale Gas field. It was interesting to see in the impeachment inquiry that Fiona Hill was asked if the Russia Government was campaigning to close down the fracking oil and gas industry in the U.S through the use of their RT news channel, because it is a threat to the Russia oil and gas industry. She said that they were doing that. People before Profit have being accused of having links with the Russia government in their campaign to spread their message. Are they under instruction to close down the oil and gas industry in Ireland? There is no climate change benefit from a ban on oil and gas drilling in Irish waters. Importing oil and gas increases the carbon footprint. The government are mulling over the idea of importing fracked gas from the U.S. Every litre of LNG imported from the U.S increases the carbon footprint of that gas ten fold. As stated already the Minister has said that it would be better not to supporting regimes that have poor human rights records.
That is interesting Manyana. Hopefully something will come of it. I think I read somewhere a couple of years ago that they were going to import gas from Texas and use it somehow at Kinsale.