Will Ireland become an oil-rich nation?

So it turns out Ireland has oil, bucket loads of the stuff apparently and do you know where it’s been hiding all this time? Off the coast of Cork. Who would’ve thought it, eh?

This oil find is the country’s first ever commercial oil well, but what will it mean for Ireland? Will there be more jobs as a result of this? And will we actually see any of the money made from the greasy substance? We attempt to figure it all out here…

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What’s all this about Ireland striking oil?

 

Yes! Ireland has struck oil. Regular tests carried out by Providence Resources in the Barryroe oil well, which is just off the coast of Cork, have confirmed that Ireland has a lot of oil – much more than anyone expected.

“It’s just like winning the lottery,” said Tony O’Reilly Jnr, the chief executive of Providence speaking about the find.

This is a historic discovery as Barryroe is officially Ireland’s first ever commercial oil well.

Sweet! So will this make us rich?

There is the chance that it could solve some of our current financial problems, yes. According to an article in The Times the oil find in Cork is possibly worth a massive $110billion in today’s oil prices.

While Providence itself owns 80 per cent of the find, The Department of Finance already levies a 25 per cent tax on any oil and gas revenues in Ireland, so this means that the exchequer could net between €23.8billion and €38.2billion, depending on how this current find is taxed when the oil well is developed further.

So even though Providence has the majority on this one, Ireland will still make a sizeable sum from the tax it places on the find.

What will this money do for the country?

Well, the potential tax gain would be more than enough to cover the €31billion debt created by Anglo Irish Bank. This could shave so much time off our current 10-15 year repayment sentence. If the debt was paid off in full, there would still be a further €16billion to pay in interest, but further oil finds could put us completely in the clear.

Aside from helping us with our crippling debts, the oil find could help to remove Ireland from its dependence on imported energy sources. Right now more than 90 per cent of gas is imported from overseas. Likewise, oil accounts for almost 60 per cent of energy used in Ireland overall. The oil find means that we could stop sourcing our energy from abroad and save money in the long term.

It would grant us some much-needed independence and put Ireland in a great position to revive its exporting industry, which in turn will hopefully attract more international interest and investment. If we get more money from international investors, further exploration activities would be able to be carried out around Ireland in the hopes of striking oil again.

A booming oil export industry could result in thousands of jobs for Irish people as well. Overall, this find can only do good things for us.

So how much oil is down there anyway?

According to reports, a 100 metre test drill carried out by Providence in Barryroe resulted in an oil find that exceeded expectations dramatically. It is reported that the test drill found an oil field that contains at least 373million barrels of oil, possibly as much as 893million. In short, there’s a load of oil off the coast of Cork.

Next question, how much will it cost to get this oil to the surface?

The development of the Barryroe oil well is estimated to cost €459million, although chances are this price could rise dramatically. Speaking about the development of the well, Tony O’Reilly Jnr said that he will need to bring in equipment and specialised personnel from a rig in Aberdeen to start with.

“We don’t have an oil industry in Ireland, but I hope that something like Barryroe and the success we are getting in that will thrive more interest in creating more of an infrastructure in Ireland,” he said.

Is there more oil anywhere else then?

Providence have said that they are also expecting some major discoveries at six other costal locations in the country. These locations include Dalkey Island, the Hook Head in Waterford and Spanish Point off Clare – tests are on-going at all these places as we speak.

Could this mean Ireland will recover?

It’s early days, but it is definitely some good news in a country that desperately needs it. So we’re choosing to see it in a positive light.