THE discovery of huge oil reserves in Ireland could bring a serious boost to the North East’s fast-growing oil services industry.
The region is looking for opportunities after Irish offshore exploration company Providence Resources this week announced estimates of up to 2.8 billion barrels of recoverable oil 30 miles off the Cork coast.
NOF Energy, the organisation representing more than 200 North East firms in the oil and gas sector shore renewables, believes the find will encourage significant investment in the area, which will require the support of established and robust supply chains.
Chief executive George Rafferty said: “The continued importance of oil and gas to the North East economy is undeniable and this significant discovery in Ireland demonstrates that this is an industry that is definitely of the here and now.
“This discovery will encourage investment by UK companies, because Ireland offers generous tax breaks for oil and gas firms.
“This will have considerable benefits for the North East as operators will look to established and experienced suppliers who can support cost-effective and safe oil and gas recovery.”
The North East oil services industry has grown strongly over the last 30 years, and has become the UK choice of oil businesses after Aberdeen and, indeed, increasingly the main choice, as Scotland’s oil capital’s market is overcrowded. Around 70% of oil and gas platforms worldwide were built in this region and growth in the sector here is expected to create tens of thousands of jobs over the next 20 years.
In NOF Energy’s membership alone, the 230 companies generate a combined turnover of £2.5bn, the majority of which comes from oil and gas. In addition, 15% – approximately 66,000 – of the total number of people working in the UK oil and gas sector reside in North East England.
Rafferty added: “The North East has a global reputation for skills, innovation and quality that has helped the region establish itself as a hub for oil and gas operations.
“The economic benefit oil and gas brings to the area, thanks to the excellent companies operating from the region, cannot be underestimated and will continue to be significant for some years to come.”
Providence chief executive Tony O’Reilly Jr said this week: “What we are announcing is the beginning of that oil industry. We hope there is a renaissance of interest by international companies who need to come to Ireland and help us to exploit our natural resources. We cannot do it alone.”
Providence intends to attract multi- national energy giants to “farm in” to its licence, which it bought from the Irish government for a nominal fee. The company has already secured the expertise of the world’s leading oil multi-national, Exxon Mobil, to explore its site at Drumquin.