Arco sees hope off Ireland
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.AMERICAN oil giant Arco thinks its pounds 161m hostile bid for Irish oil exploration company Aran will greatly improve the chance of Ireland becoming an oil-producing nation.
Terry Dallas, Arco's finance director, said one of the first moves the company would make if it acquired Aran would be to carry out a $3m seismic survey on the Connemara blocks off Ireland's west coast. If tests were positive Arco would move on to a drilling programme, likely to cost $15m.
Aran owns the Connemara field, which it believes could contain 80 million barrels of oil. BP, which was originally involved, drilled five wells in the earlyEighties and struck oil in three of them. However, the technical problems of exploiting a field in water 1,000ft deep persuaded BP that the field was not economic, and it withdrew in1989.
Mr Dallas said that new surveying and drilling techniques, some developed for the deep waters west of Shetland, would increase the chances of producing oil successfully off Ireland. "We think Connemara is quite interesting," he said. "It's a technically a high-risk play, but it looks good to us."
The first stage will be to see how fractured the field is. If it is divided into a number of different pockets, it will be more expensive to extract the oil. However, the development of ships that double as oil platforms, which can be easily moved from one site to another, could overcome this difficulty.
Aran has said it is in the process of developing the Connemara field, but Arco says its superior technology and deeper pockets mean it is more likely to bring the oil ashore. However, in its offer document posted to Aran shareholders on Friday, it warned that "considerable appraisal work still needs to be done before commerciality can be determined".
Arco also highlighted the risks associated with the BP-operated Schiehallion field some 150km west of Shetland, where Aran has a 17.65 per cent stake. Widely seen as the jewel in Aran's crown, Schiehallion was the subject of a positive well test last week just hours after Arco launched its surprise takeover bid.
In response, Aran argued that "such discounting of risk may explain the low level of Arco's offer", and urged investors to take no action. The stock market, for now, seems to agree. Shares in Aran closed at 66.5p on Friday, comfortably above Arco's 61.5p per share offer.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments