Offshore oil reserves could boost weak Irish economy
A reservoir of oil just 45 miles off the Irish coast is estimated to contain more than a billion barrels. The potential extraction of this oil has come at a perfect time for Ireland’s struggling economy, Burgess writes.
The world runs on oil and gas, and despite the effort of environmentalists to push for a transition to greener energy sources, it will do so for a long time to come. That means that finding a reserve of hydrocarbons could be a big boost to a countries economy. It allows imports to be cut, and if the reserve is large enough revenues can be earned from exports. Even for tiny countries with tiny discoveries the impact of domestic oil production can be dramatic.
Over the summer Providence Resource’s discovered a reservoir of oil in the Barryoe field just 45 miles off the Irish coast, estimated to contain more than a billion barrels. Actually the discovery was made nearly 50 years ago, but only with today’s technology has the oil become economically viable to extract. (More from Oilprice.com: Don't Bet Against Shale Gas)
The discovery and potential extraction of this oil has come at a perfect time for Ireland’s struggling economy. For nearly a decade Ireland has been suffering from a property boom and bust which has devastated its economy. In an attempt to attract oil companies to the country it has set corporation tax at just 25 percent, and allows any exploration costs to be written off. In contrast the UK last year uncreased its oil company corporation tax from 50% to 62%. (More from Oilprice.com: Why North American Gas Prices Are So High)
Fergus O’Dowd, the Natural Resource Minister for Ireland, has said that just making some small discoveries “could have a massive impact on the economy. The key to it all is to get people to prospect, to get out there to drill.”
Drilling for oil and gas offers a realistic chance to solve Ireland’s economic woes in the near-term.