The dozens of colourful bars and coffee shops in central Cork, along the banks of the river Lee, are still bustling as money flows into the city's tills – despite Ireland's precarious finances – from tourism, surrounding dairy farms and the presence of IT giants such as Apple.

But the self-styled rebel city – harking back to its fiercely independent roots – could be about to move up a gear as it vies to become the Irish equivalent of Aberdeen and the centre of a new oil industry.

The billionaire O'Reilly dynasty is promising to develop the country's first oilfield following new analysis of drilling results that suggests they have struck black gold in the Celtic Sea.

Shares in Providence Resources, in which the former Irish rugby star and media magnate Tony O'Reilly is an investor and his son – another Tony – is chief executive, have soared from 180p a year ago to 686p as a result of the latest findings from its Barryroe field, off Cork, and increasing excitement about other prospects all around the coast.

You might expect the locals to be celebrating, and certainly one middle-aged gambler, perched on a cushioned stool before a slot-machine at the Gold Rush casino on MacCurtain Street, is delighted. "Good luck to those guys," she says over piped music, her eyes glued to neon dollar notes whirling in front of her. "An oil discovery has got to be a good thing, hasn't it? It could bring jobs, which would stop all our children having to go abroad to London and Canada."

But claims that the once-mighty Celtic Tiger has a chance to reinvent itself – this time as a petroleum state – are met with indifference elsewhere.

Alan Duff, who runs the St Gabriel's Credit Union on St Patrick's Quay, around the corner from the Gold Rush, is more than well-acquainted with the debts of a hard-hit nation. He is more downbeat about the oil find.

Petrol price

"It's hard to get excited about this," says the sharp-suited but softly spoken manager. "You know the government have given away the leases for next to nothing and even if the oil is ever brought ashore it will not lead to a fall in the price of petrol."

Out on the coast, closer to the waters where Providence has made its mark, there is also scepticism – plus worries about the impact that oil can have on the environment.

Rory Jackson, who makes a now frugal living fixing up old yachts, says too many false dawns have been declared by the oil industry for him to get excited. "These stories always seem to coincide with the government announcing tax increases," he says, pointing to punitive budget cuts to child benefit expected in December.

The locals' reluctance to celebrate is understandable, not least because there have been some high-profile setbacks in the Irish oil and gas business, such as Ramco Energy's Seven Heads gas field producing water as well as gas at one stage. Shell has taken more than a decade to develop the Corrib gas field due to popular opposition to a pipeline route and the O'Reilly family's bid to become Ewing-type oil barons is not exactly new.

The family have been the driving force behind the Barryroe field and its promised 100,000 barrels a day potential for almost 30 years, and have been involved with several discoveries that ultimately went nowhere.

O'Reilly Jr acknowledges this. "But that is why this is important," he says. "My father must have sunk $60m or $70m into searching for oil and gas. Now we believe he is vindicated."

Providence announced this week that its latest assessments of the Celtic Sea field indicated recoverable reserves of 280m barrels – far more than ever before and worth about £20bn at today's prices.

O'Reilly is in no doubt that this is the big one everyone had been waiting for. "What we are announcing is the beginning of that [oil] industry. We hope there is a renaissance of international companies who come to Ireland and help us exploit our natural resources."

Overtures

O'Reilly claims he has had "overtures" from oil companies in Asia and America as well as Europe which are willing to share the risk – and potential $1bn (£620m) cost – of the first-phase development. ExxonMobil, the world's largest non-state-owned oil company, is already a partner with Providence at another offshore site, Dunquin in the Atlantic basin, where the two companies hope to start drilling in 2013.

O'Reilly wants the oil to be landed in Ireland and refined locally but says a partner would be needed for this too. There is already a refinery at Whitegate, near Cork, plus a deep-water harbour that would provide a base for support vessels needed to develop the oilfield.

But the biggest prize for Ireland would be if the Barryroe scheme develops as O'Reilly hopes – and triggers a resurgence of interest not only in the Celtic Sea but in other regions.

Gas has been piped from the Kinsale Head field off Cork for 30 years and there have been other oil finds around the coastline, but none have been big enough to be worth developing. Now the economics have changed – as a result of higher energy prices, lower taxes and new drilling techniques – for fields such as Barryroe. "We are leading the charge but we hope our success causes others to think about Ireland again," says O'Reilly. "People are going to far-flung regions such as the Arctic, when they could be active in much more benign conditions."

John Mullins, president of the Cork chamber of commerce and boss of the state-owned gas group Bord Gáis, says foreign investment from IT and pharmaceutical groups has kept the region more buoyant than many others during the big economic downturn. Nevertheless, oil could help stem unemployment, which is nearly 10%. "I'm not an expert in geology or seismology but all the information suggests quite a significant commercial find," says Mullins, who has already set up an oil and gas exploration group at the chamber. "Whether it proves to be a false dawn or not, we need to be ready with partners to help."

Also hoping for an oil boom is the Port of Cork. Executives there have already put forward plans for a €40m (£32m) new multi-purpose terminal. This is mainly to handle containerised traffic but could be used for the oil support business, they explain. The dock managers have already received a delegation of Exxon executives.

Foreign companies seem to be the key to much of what happens in Ireland at present. As one property manager said: "When you talk to one of these large [overseas] firms it is like people from another planet. They are full of hope and optimism whereas locals have had so much bad news that cannot conceive anything getting better. No one in Ireland, perhaps O'Reilly aside, wants to take a risk: they're full of fear."