Pictured (l-r): Stephen Ruane, Director, PwC oil and gas practice; Tony O'Reilly, CEO, Providence Resources Plc and Ronan MacNioclais, Partner, PwC oil and gas practice.
PwC’s 2017 Irish oil and gas survey, which launched at the Atlantic Ireland conference in Dublin, finds that there are signs of recovery in the sector after a turbulent few years.
Following 12 months that have seen a steadying in the price of oil and gas after a prolonged period of declining prices, and challenging years in 2015 and 2016, the report notes that the stabilisation of global prices has relieved some of the pressure on the industry.
74% of those surveyed rating the outlook of the Irish oil and gas industry as favourable, compared to 28% in 2016. Commercial discoveries are seen as playing a critical role in the development of the industry. With increased investment planned in Irish waters over the next two years, the prospects of making a successful commercial discovery will hopefully be better than was previously the case.
"The Irish oil and gas industry may become more attractive for investment as the price of oil and gas is expected to increase."
The survey was carried out during the summer of 2017 amongst the key players in the Irish oil and gas industry including foreign and Irish headquartered entities carrying out petroleum production, exploration and services activities as well as economists with an interest in the oil and gas sector.
Commenting on the survey results, Ronan MacNioclais, PwC oil and gas practice partner, said: “The significant and sustained fall in the price of oil and gas in recent years has had a dramatic impact on the Irish oil and gas industry. As noted in prior years, Ireland is viewed internationally as a high risk location for investment in oil and gas exploration due to the lack of historic commercial discoveries.
"At times of low oil and gas prices, investors will invest in high return low risk locations, which unfortunately we are not. However the recent stabilisation in oil prices has clearly lead to an increase in confidence among industry players. The Irish oil and gas industry may become more attractive for investment as the price of oil and gas is expected to increase.”
The increase in global prices is reflected in an increase in expected investment levels. Based on the survey, the aggregate estimated spend on exploration activities over the next two years is expected to be in the region of €502m. This represents an increase from the equivalent figure of €300 million in 2016, and is an encouraging indicator about the long-term prospects of the industry in Ireland given the cost of exploring here.
Key findings in the survey include:
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