Providence Resources to seek compensation from State if oil drill ban passes into law
Irish exploration company Providence Resources has said it will seek financial compensation from the Government should the Dáil pass into law proposed legislation targeting a ban on oil and gas drilling in Irish waters.
"Should this bill be enacted, we would rightly seek financial redress from the Irish State in respect of our very significant historical investment to date on behalf of our shareholders," Providence chief executive Tony O'Reilly Jnr said.
People Before Profit's Climate Emergency Bill - which, ultimately, seeks an end to offshore drilling in Ireland - has controversially been stalled by the Government ahead of it progressing to select committee stage to be debated by supportive TDs.
The party has not ruled out legal action if its bill is killed by the Government. It said, last week, that it has been legally advised that there is no obligation on the State to compensate exploration licence holders should a drilling ban be written into law.
Despite regulatory delays, Providence has a $200m (€176m), five-well drilling programme planned for its flagship Barryroe field, off the Cork coast, towards the end of this year.
"To be clear, this bill - if enacted as currently drafted - will do nothing to reduce Ireland's CO2 footprint and will, in fact, substantially increase the risk of an energy supply shock as Ireland will become even more reliant on imported oil and gas from places like Russia and the Middle East," Mr O'Reilly said.
"The key to delivering meaningful changes to Ireland's CO2 emissions are wholesale changes in consumer lifestyles, behaviour and consumption, which the oil and gas industry encourages as part of a transition to a lower carbon Ireland," he said.
However, Mr O'Reilly said he could see "no logical reason" why the Government - "or any other political party" - wouldn't avail of the "secure and cost-effective" opportunity to source the required oil and gas needs locally.
Mr O'Reilly was speaking on the back of figures showing Providence cut its post-tax losses, last year, from €20.4m to €4.8m.
The company's share price surged by over 16% on the back of the results and the company saying its priority remains receiving a $9m loan advance from its Chinese partners at Barryroe and on getting regulatory approval to restart work on the project.
However, the company has warned that it is likely to cut jobs due to "a significant reduction" in staffing requirements.
"Our success in farming out [many of its licences] has led to Providence's role changing from operator to non-operating partner. This, combined with other factors such as the lack of new licensing opportunities offshore Ireland, together with a limitation on any international expansion, has led the company to commence a complete re-alignment of its operating model," Mr O'Reilly said.
Talks with prospective development partners for its Newgrange prospect, off the west coast, are continuing and Providence is awaiting approval to convert a licensing option into a frontier exploration licence at its Avalon prospect in the hotly-tipped Porcupine Basin.
However, Mr O'Reilly admitted that the current political environment has been "disruptive and damaging" to industry sentiment.
