Ireland could become the world's next oil-producing country, according to an authoritative analysis of test-drilling off Ireland's western coast in the Porcupine Basin of the Atlantic Ocean.
An oil field discovered under 1,250 feet of water there last summer by British Petroleum and Aran Oil Co. of Ireland could be large enough to make Ireland self-sufficient in oil for a decade beginning in the mid-1980s, according to a report released this week by British stockbrokers and analysts Wood, Mackenzie and Co., the leading experts on oil reserves in the nearby North Sea.
Both BP and Irish government officials cautioned that it is too early to know how much oil is in the field or whether production is feasible in such deep water more than 100 miles out into the Atlantic.
The BP-Aran consortium will be doing more appraisal drilling there next month, but Wood, Mackenzie forecast that "it seems highly probable" that commercial development will take place despite the technological challenge of drilling in unprecedented depths in open ocean.
Two other major oil companies, Phillips of the United States and ELF of France, also are drilling exploratory wells off Ireland's western coast this summer where Phillips made a small, noncommercial discovery in 1978.
Wood, Mackenzie's top oil expert said in Dublin that "cautious optimism" was now justified about Irish prospects for significant offshore oil production.
This news could not have come at better time for Dublin. Ireland must now import about 80 percent of its energy, and the rapidly rising price of oil has threatened the island nation's economic miracle of the 1960s and 1970s.
Its economic growth rate, which was the highest in Europe, has fallen to just 1 percent this year, while inflation, fueled by high energy costs, has soared above 20 percent. Workers' wages have fallen behind inflation for the first time since the country's belated post-war industrial revolution began.
Despite a still healthy export trade, Ireland's balance of payments has fallen deeply into deficit by an amount almost exactly equaling the big bill it pays for imported oil.
Irish Prime Minister George Haughey has increased taxes on oil and gasoline considerably to try to force down consumption and raise revenue to cut budget deficits. He has warned that government spending and pay raises will have to be held down to fight inflation and maintain the competitive advantage of electronics, textiles and other exports of the many foreign firms attracted to Ireland for trade inside Europe's Common Market.
"When some of the strongest economies in the world are trimming their sails this way, it would indeed be foolish -- if not dangerous -- for us in Ireland to act differently," Haughey recently told the Irish parliament.
But if the BP-Aran offshore oil discovery alone is as big and lucrative as Wood, Mackenzie has estimated -- making it equivalent to a "medium-sized field" in the North Sea -- Ireland would have enough top-priced, high-quality oil to give its economy another big boost.
It would produce more oil than it uses, its balance of payments deficit would disappear, and the government would collect annual oil tax and royalties equal to half or more of its current income tax revenue.
Wood, Mackenzie warned, however, that major technological problems must be overcome to harvest this or any other oil discovered off the Irish coast because of the deep water and rough weather.
"With depths of between 1,200 and 1,500 feet and full exposure to the Atlantic," the area off the west coast of Ireland "will pose many new problems," the report said.
The world's deepest offshore oil development now is in 1,000 feet of water in the relatively calm Gulf of Mexico. The deepest drilling so far in the much stormier North Sea has been 600 feet down.
Wood, Mackenzie concluded, however, that the necessary technological advances are possible. Phillips, for example, is sending the world's largest semisubmersible oil rig into the Atlantic this summer for its test-drilling off the Irish coast.
The technological problems could postpone Irish offshore oil development until 1983 or 1984 at the soonest, according to Wood, Mackenzie.
"As best, a gap of several years remain to be bridged" in the Irish economy and energy supply, it said. At worst, "The technical difficulties of deepwater production could prove too daunting, and the Irish oil era might never come to pass," it continued.
Irish officials remain cautious. Past oil exploration off Ireland's southern coast also raised high hopes, but produced only one significant natural gas field, which is expected to reach full production next year. The Irish government also does not want dreams of future oil wealth to cloud its current efforts to curb inflation and conserve energy, according to officials in Dublin.
"We should not lose our heads," the Irish Times newspaper advised this week. "We should not bank on this as the solution to all our problems. But we should rejoice mightily."