'Oil take that' - Chamber President
There is four times as much oil off the coast of Cork at Barryroe than was originally thought, a discovery warmly welcomed by business leaders in Cork after the announcement yesterday.
Studies carried out in March this year show that there is between one and 1.6 billion barrels of oil at the oil field, four times as much was originally expected.
While the actual retrievable amount of barrels of oil will be dependent on drilling, production and other costs, there is still expected to be significant amounts entering the millions.
The announcement to Stock Exchanges in London and Dublin was welcomed by Cork Chamber of Commerce President, John Mullins, who point to the “advantages of the oil being brought ashore in Cork and the benefits it could create for the local economy.”
“Cork Chamber has always highlighted Cork’s potential as a national energy hub and this copper fastens that view. While it is early days, we look forward to understanding more about the field’s potential.
"Obviously this development is of national significance but it also offers great promise in terms of additional economic activity for Cork, in terms of investment and job creation,” he said.
"Cork has a long track record of infrastructure provision for energy-related projects such as the Whitegate oil refinery, while we also have a workforce with engineering and project management experience from the pharmaceutical sector going back 20 years.”
“Given Cork’s geographical positioning, abundant energy assets in supply infrastructure and significant green research centres, its diverse workforce and innovative business climate, the Cork region is well positioned to capitalise on the job creating aspects of this find.”
Trade union SIPTU also welcomed the announcement of the oil potential but urged caution on the benefits to the exchequer and the Irish public.
“We would be concerned on the low returns to the Irish exchequer under the current fiscal regime and hope that the maximum benefit for employment in the Irish oil and gas industry will be achieved in the offshore work,” said one SIPTU spokesman.
A report last year by SIPTU examining alternatives in the oil and gas areas in Ireland highlighted several alternatives to the current scheme where a tax rate of between 25 per cent and 40 per cent applies to profits from production of oil or gas.
However, the costs of production and capital during discovery can be written off while the profits must exceed a certain quota of capital invested before the tax limits change.
“The 3D survey that we conducted is almost like an upgrade from an X-Ray to a Catscan,” said John O’Sullivan, Providence's Technical Director for the Barryroe oil field and originally from Ballinlough in Cork.
“Not only can we see the bones but also the muscles and veins. Through the new technology we now have the reservoir completely mapped. The oil numbers quoted is the oil in place. The oil fields in North Sea leave 60 per cent of their oil in the ground.”
“The process requires certain efficiencies such as injecting gallons of water so for economic viability the likely percentage is 38 which would still equate to 380 million barrels at €100 a barrel.”
Mr O’Sullivan also confirmed that the type of oil in Barryroe is a “waxy” kind, which requires refiners to separate the wax from the oil, both of which are commercially viable.
“The oil in the North Sea is a crude oil whereas this is waxy – what we compare to a full bodied red wine. It’s very bouncy, sweet and leaves you with a hangover. Refiners can sell the wax for nearly as much as the actual oil.”
Stabilising high oil process in recent years has allowed the exploration of the oil field to commence, as economic viability is essential to investing what is expected to be over €500 million, the cost of extracting the natural resources 50 kilometres off the Cork coast.