Banking processing to blame for Barryroe loan delays, Providence says

After several delays, the Irish oil firm Providence Resources has still not received the previously agreed $9 million loan from the Chinese firm APEC, its partner in the Barryroe project offshore Ireland.

Providence’s subsidiary Exola and partner Lansdowne in 2018 agreed to farm-out a 50% in SEL 1/11 license offshore Ireland, containing the Barryroe field, to APEC Energy Enterprise. APEC is a privately-owned Chinese company which has a strategic partnership with China Oilfield Services.

The parties had later agreed for APEC to provide an advance loan of $9 million to cover the costs associated with front-end well-site survey operations and pre-drill well consenting.

On June 5, 2019, the Providence said it had agreed on certain amendments to the Farm-Out Agreement  for the Barryroe Project with APEC Energy Enterprises Limited (“APEC”) and, together with EXOLA and Lansdowne, the “Barryroe Partners”, including a revised backstop date with APEC for receipt of the $9 million loan advanced to June 14, 2019.

This backstop date was then extended several times to July 19, 2019, with APEC at one point claiming it had sent the funds, and Providence saying the funds had not reached its bank account.

In a statement on Monday, Providence said it had received the proof the funds had indeed been sent, and that the delays were caused by banking processing delays.

Providence said: “The Company has received further documentation showing the mechanics of the transfer of $US 10 million to Providence’s account. However, due to ongoing banking processing delays, the funds have yet to be credited to Providence’s account. Accordingly, to facilitate this, the Barryroe Partners have agreed to a backstop extension of on or before July 26, 2019.”

The Barryroe oil accumulation rests in c. 100-meter water depth in the North Celtic Sea Basin and is located c. 50 kilometers off the south coast of Ireland.

Providence has earlier said that well site survey operations, subject to receiving of all regulatory approvals and required funding, are supposed to start Q3 2019. In its earlier update, Providence said that drilling would start in the fourth quarter of 2019, instead of, as previously expected 3Q.

The partners in the project in February said that that COSL nominated its 6th generation “COSL Innovator” semi-submersible drilling unit for Barryroe drilling.

Offshore Energy Today Staff

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