ExxonMobil has no plans for further drilling in Irish waters after abandoning a well off the southwest coast where it failed to find commercial quantities of oil or gas.
The multinational confirmed yesterday it had completed drilling a deepwater exploration well in the Porcupine basin – 150km from the Kerry coast – but found no commercially recoverable oil or gas.
“The well will, therefore, be safely plugged and abandoned,” Exxon Exploration and Production Ireland said.
A spokesman subsequently confirmed “there are no plans at present for further drilling in Irish waters”.
Exxon began drilling an exploratory well in the Dunquin licence in the south Porcupine last April. Positive results could have led to it drilling further wells there.
Yesterday the company said the well held water and residual quantities of oil.
Its European exploration director, Kevin Biddle, said that the project was high risk and potentially high reward, but was not successful.
“The result underlines the uncertain nature of deepwater exploration,” he added.
The oil and gas giant’s decision is a setback for hopes of a fresh wave of oil and gas exploration in Irish territorial waters, and in particular for the southern Porcupine Basin, which covers 25,000sq km.
Merrion Capital analyst Muna Muleya said yesterday's announcement would push back further efforts to explore the area by a few years.
“People now have to go back and find out why it failed. It may take a while before companies decide to drill there again; I would say that it is two or three years down the line.”
However, he acknowledged that Exxon’s drilling results indicated that the basin does contain oil.
"It was just the first well, it's not all bad news."
Dunquin licence
Tony O'Reilly jnr, chief executive of Irish company Providence, which holds 16 per cent of the Dunquin licence and has interests in other licences in the basin, described the results as encouraging.
“We thought it would be gas, but it’s oil; that helps to refine what we already know,” he said. “International oil companies will be intrigued by this.”
Mr O’Reilly argued that the presence of residual oil, the remains of a reservoir that has drained away, vindicates his company’s position that the area’s geology indicates that the area could contain large quantities of oil and gas.
Exxon holds 25.5 per cent of the Dunquin licence and is the operator, Italian giant Eni has 27.5 per cent, and Spanish player Repsol 25 per cent. Atlantic Petroleum and Sosina have smaller stakes.
Providence has holdings in three other licences in the south Porcupine: Drombeg, where it has 80 per cent, Cuchulain 3.2 per cent, and Newgrange 40 per cent.
Providence Resource’s shares closed down 9.48 per cent at 5.55 in Dublin yesterday.
