Oil and gas exploration company Providence Resources has begun drilling at its licence at Barryroe, in the North Celtic Sea Basin offshore southern Ireland.

The drilling and testing programme is expected to take about 60 days.

Providence operates the well, and currently holds a 50 per cent interest in the licence, with partners San Leon Energy and Lansdowne Oil and Gas holding the remaining 30 per cent and 20 per cent respectively.

Chief executive Tony O’Reilly said the drilling was “a very exciting time for Providence and its shareholders”.

Three wells have already been drilled in the structure; the latest well will offset one of these. The objective will be to demonstrate commercial flow rates of 1,800 barrels of oil per day or better from the well.

Analysts viewed the move as significant for the three firms.

“The Irish offshore – especially the Celtic Sea, has promised much in the past but has ultimately not managed to deliver a commercial development other than the Kinsale Head and Ballycotton gas fields,” Davy analyst Job Langbroek wrote in a note.

“The advent of new technology and much higher oil and gas prices offer an opportunity to re-examine a range of 'unconventional oil' discoveries in the region. Barryroe is one of these, with the operator obviously looking to increase production rates to commercial levels.”