Shares in Irish oil and gas firms Barryroe Offshore Energy PLC (AIM:BEY, OTC:PVDRF) and Lansdowne Oil & Gas (AIM:LOGP) fell in Monday’s early deals as efforts to deliver a project off the Cork coast have been stifled by the leader of Ireland’s Green Party.
Eamon Ryan, Minister for Environment, Climate and Communications in Ireland’s coalition government, at the end of last week sent a letter to the partners in the Barryroe venture stating that he is “not satisfied with the financial capability of the applicants” following a protracted assessment of an application to extend the licences that cover the Barryroe field.
The companies now have no rights over the asset, according to the Irish government.
Ryan's department said that energy policy was not the reason for the permit decision, according to comments provided to Irish media.
The Barryroe licence (SEL1/11) expired in July 2021 and the venture partners have been seeking, through a government process, to extend or renew the licence which would have allowed a potentially significant new project to proceed into appraisal and development.
According to the development plans, Phase 1A and Phase 1B of the project would be host to between 52mln and 109mln barrels of crude. These domestic barrels of crude oil are potentially significant in a country that is a net importer of fuel and which, outside of Dublin, still largely relies on heating oil to heat its homes.
Barryroe Offshore Energy, referring to a number of legal and licence terms and conditions, in a statement noted that “assessment has concluded that from a technical perspective the Barryroe Lease Undertaking application is satisfactory for the purpose of Section 3 of the 2007 Licensing Terms and that the technical capability of the applicants is satisfactory for the purpose of Section 9(A) of the Act of 1960.
“However the letter states that the applicants do not meet the investment cover criterion as required by the Financial Capability Assessment Guidance. Consequently, the SEL1/11 licensees have no rights over the acreage held under SEL1/11 as SEL1/11 expired on 13 July 2021.”
Steve Boldy, chief executive of Lansdowne Oil & Gas (AIM:LOGP), in a separate statement added: “It is with great reluctance that we must now resort to legal proceedings in relation to our investment as we would much rather have moved forward with a lease undertaking and appraisal drilling, for which funds had been sourced, to advance Barryroe toward development for the benefit of all stakeholders.
“We believe we have a very strong claim against the Irish government and the company will be resolute in defending and protecting the rights and investment of our shareholders."
In London, Barryroe and Lansdowne shares each fell by around 45% to change hands at 1p and 0.23p respectively.