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By Brianna Panzica

Ireland has had it rough since the Great Recession hit. The nation was forced to request a bailout from the eurozone, and citizens watched unemployment rise to 14.8% while austerity measures controlled the economy for five years. It's seen the neighboring UK bolster its economy through oil discoveries in the North. Sea, and focus on Ireland's economy has even taken a backseat as bigger nations like Italy and Spain suffer through the financial crisis.

Meanwhile, Ireland was consuming an average of 142,000 barrels of oil a day (last year's average) and importing every one. But all that could change with a new discovery by Dublin-based oil company Providence Resources (OTC:PVDRF) [LON: PVR].

Providence was exploring the Barryroe field in the Celtic Sea off the coast of Ireland. It had been discovered in the 1970s, but at the time oil prices were between $10 and $15, and offshore production was expensive. The project was quickly abandoned.

Now, however, the price of oil hovers around $100. Offshore production is much more economical, and Ireland needs a source of revenue.

So the Barryroe field was revisited. When an initial estimate said the field could contain 1.7 billion barrels of oil, it still was not clear what percentage of that could be recovered. But today Providence revealed the estimated recoverable oil – and it was much higher than analysts expected. Barryroe could hold up to 280 million barrels of recoverable oil, Providence said. At its peak, each platform could yield up to 100,000 barrels a day.

From the Wall Street Journal:

“I hope it's a calling card to the industry at large to say, hey guys look at Ireland – it's in your backyard,” said Providence Chief Executive Tony O'Reilly. “It's massively underexplored and here's a demonstration there are active hydrocarbon systems in Ireland of scale.”

Providence's main reservoir at Barryroe is Basal Wealdon, and the company believes the recovery rate at this location is about 31%. For the rest of the field, estimated recovery falls in a much larger range – 17% to 43%.

From the Guardian:

Northland analyst Andrew McGeary said: “This announcement does not disappoint but the fairly wide range indicated suggests this is a fairly early prognosis open to further refining. However, if the 31% incorporated into the initial development scenario proves accurate this would be very good news."

But this also isn't the end of it. The discovery opens up new opportunity all across Ireland, which has other offshore fields that are also not yet under development. The Corrib field was discovered in 1996, but so far no exploration or development has moved forward with the project.

Providence plans to bring in energy companies from across the globe to aid in development of the field. It currently has engaged Lansdowne Oil and Gas Plc [LON: LOGP], and Exxon Mobil (NYSE:XOM) has agreed to help explore the site at Drumquin, but it is also planning a sale of part of its own 80% stake in the first quarter of 2013.

The discovery is just the beginning of Irish oil potential. Providence plans to drill 41 production wells and 22 water-injection wells at the site, and its continued exploration – as well as the exploration of other fields – could provide a much-needed boost to Ireland's suffering economy.

Providence jumped 3.6% on Wednesday to 725p before settling back down at 696p.

Disclosure: None

Source: Providence Resources' Irish Oil Potential