Providence CEO Sees Many Benefits from Irish Gasfield
Although a final investment decision (FID) to develop the Barryroe field offshore Ireland is still ahead of it, Providence Resources' CEO Alan Linn believes that that he now has the corporate, environmental and political pieces in place to proceed.
The Vermilion-operated Corrib field so far has no other successor; and there was until recently not much hope for Barryroe in that regard as it had been considered an oilfield. But after re-examining the seismic data, it turns out that Barryroe could satisfy some of the commercial and political needs for clean energy in Ireland. This is despite the difficulties experienced by Ramco and its ill-fated Seven Heads development in the same region over a decade ago.
"The consortium is made up of good quality companies who invest in the project through deferred billing, and recover their investment by deferred billing recovery plus additional income from production for the life of the field to ensure a long term benefit from the project," Linn told NGW in an interview late July.
"There were some overlapping demands for the type of expertise they offer and it took a bit of time to line everyone up, but we were able to reach an agreement. I joined Providence from Third Energy to take Barryroe into an oil development. But following a detailed review of the geology, it is clear we will also produce a lot of gas. We reprocessed all the 3D seismic in 2018 and it has helped build our confidence on reservoir connectivity. Barryroe crude is a light, low sulphur, high gas-to-oil crude which is likely to trade at a few dollars/barrel premium to Brent. Our current estimates show that the field remains profitable below $26/barrel Brent.
"Above the core oil leg, is a gas reservoir. The combination of associated and non-associated gas could support 80-120mn ft³/day of gas production for many years. This will be confirmed when we update the competent person's report before the FID. The field has some compartmentalisation but the reprocessing of the seismic helped confirm that the faulting is limited. Seven Heads lies directly above Barryroe and the faulting present in this field happened much more recently in geologic time. Some Barryroe fault panels will communicate and others not. The panels are large, but there are faults and so we are taking a phased approach with development.
"There is significant demand for gas: once Corrib expires there will be no indigenous gas, Ireland will be importing from the UK and this gas will have a significantly larger carbon footprint. Locally produced gas can be efficiently transported and be used to supply efficient power stations, industry and residential heating. The oil is suitable as chemical feedstock, and my preference is to use it in chemical refineries rather than for fuel.
"It makes sense, particularly in a post-Brexit world, with Ireland at the very end of the pipeline, for the country to be as self-sufficient as possible. We want to produce energy as cleanly as possible and we have to balance protecting the environment for future generations and maintaining our present quality of life. We also must ensure that the energy transition process is economic and cost effective, otherwise our quality of life will suffer. It is a challenging balance to achieve.
"We believe the best location from Barryroe gas to come ashore with be the Inch Terminal location which was used by Kinsale Energy for many years before the fields were shut down. In Cork basin, near the Kinsale Head depleted gas field, location there are two 500-MW gas fired power plants which we could supply. The electricity grid needs stability to avoid blackouts, particularly as the use of intermittent electricity sources continues to increase. Gas fired power stations offer grid stability which is essential as the use of renewables continues to grow.
"The Irish government has focused primarily upon renewables and as a result it now has some catching up to do on the deployment of carbon capture and sequestration (CCS) technologies. The UK is developing the economic models which can economically support the introduction of CCS. Should Ireland adopt the UK models, it could fast track funding for a CCS project in Kinsale Head, to inject CO2 captured from the local gas fired power plants. Kinsale Head has the potential to store 300mn metric tons of CO2. I envision a future where locally produced oil and gas from Barryroe support Irish energy security and grid stability with captured CO2 being sent offshore into Kinsale Head. This approach would take us a long way down the road to carbon neutral and support the local economy."