Exploration specialist Fastnet will begin work this year to establish if the area beneath the existing Kinsale gas field is likely to contain oil.

Fastnet yesterday said it had agreed a deal with Petronas subsidiary Kinsale Energy to farm into the so-called “deep Kinsale prospect”. It lies deep below the existing Kinsale gas field, which has by now given up all but 3 per cent of its reserves.

Fastnet managing director Paul Griffiths said yesterday that, based on existing knowledge of its geology, it was highly probable that it contains oil.

Geological studies

As part of its deal with Kinsale Energy, Fastnet will this year carry out engineering and geological studies and a wide-ranging, three-dimensional seismic survey. The agreement requires that this will be be completed by the end of this year.

Mr Griffiths said the deal required Fastnet to begin exploratory drilling in 2015, but it was hoped to begin next year. Fastnet will get an initial 60 per cent working interest in return for funding 100 per cent of drilling and testing costs.

The company believes that the area has similar characteristics to Barryroe, the nearby proven oil and gas prospect majority-owned by Providence Resources, which could produce up to 250 million barrels of oil.