Emerald Oil

Ireland gushes with hope

If autos could run on peat, the Irish would be energy sultans. But because the republic (pop. 3.4 million) has almost no other known resources of fuel, it must satisfy 65% of its energy needs with imported oil. For more than a decade, Ireland has been green with envy over Britain's North Sea petroleum windfall and has searched vainly for its own bonanza. Lately, though, Dublin has been awash in a gusher of speculation about a discovery in the Celtic Sea, which separates Ireland and Britain. Last week the rumors proved to be valid. Gulf Oil acknowledged that a test well only 20 miles south of the Waterford coast had produced a flow that suggests a sizable field. The early results, said Junior Energy Minister Eddie Collins, "are very encouraging indeed." The mood on the Dublin and London stock markets resembled an Irish wake. Euphoric investors rushed to buy into oil companies that own stakes in the Celtic Sea. Most bought shares of Atlantic Resources, a tiny Irish company that owns a one-third interest in the promising new find; Union Oil and Gulf own the other two-thirds. In less than two months the company's shares have risen from 46-c- to a high of $7.76. The biggest individual winner appears to be Atlantic Resources Shareholder Anthony O'Reilly, president of H.J. Heinz foods, whose paper profits total an estimated $3.5 million. The stockbrokers' enthusiasm spilled over into Dublin pubs as well, where patrons bypassed the usual topics of politics and horse racing to discuss the fine points of sand porosity and step-out drilling. If the Celtic Sea discovery proves to be a commercially exploitable field, which can be determined only through further tests, the first revenue would begin flowing in about four years. The output of even a modest field, about 100,000 bbl. a day, would eliminate Ireland's $1 billion annual oil-import bill and provide a much needed tonic for the country's depressed economy. Irish unemployment is approaching 15%, with no turnaround in sight. The government has created some new jobs by providing tax incentives to high-tech businesses, but at a cost of higher government deficits and more taxes for wage earners. The government's share of potential offshore-oil revenues, which is expected to be between 8% and 16%, would wipe out a significant chunk of Ireland's $1.1 billion budget deficit. Until recently, Ireland's exploration for oil has concentrated on Porcupine Basin, a storm-whipped area of the Atlantic 130 miles west of Galway Bay. The poor drilling conditions and evidence of only small deposits in that basin prompted a shift of attention to the shallower, calmer Celtic Sea. The discovery of a field there entails one other bit of Irish luck. The well lies not far offshore from a refinery that is currently used to process imported crude. This file is automatically generated by a robot program, so viewer discretion is required.