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Government cancels Peniche Basin oil concession contracts

OilProtestWebSummitOn the day that Al Gore, Nobel Peace Prize winner, addressed thousands of young delegates at the Lisbon’s 2017 Web Summit, dozens of activists made a peaceful protest outside the Altice Arena to reinforce their ‘no to oil and gas exploration in Portugal’ message.

According to Isabel Rosa from the International Center for Peace Research, the demonstration was held because Al Gore was present and the goal was to associate his environmental work, with "non-drilling of oil and natural gas on the Portuguese coast."

On the last day of the Web Summit tekkies' conference, activists staged with their Red Line campaign which focuses on the critical of 2°C global temperature rise which will, according to many scientists, be the "no return point for climate catastrophe." Knitting red scarves may be seen as at bit '80s but this has been effective in publicising the campaign.

The activists say that people now are more aware about the 'oil and gas vs solar and hydro energy' issues and that Portugal is wasting its natural advantages in solar energy production.

Isabel Rosa said that "to survive on this planet" we must move to renewable energies, such as solar, geothermal, wind and sea and that on behalf of future generations, "Portugal can and should be a pioneering country in this practice and an example for the energy transition."

As if by magic, the oil exploration concession contracts covering the Peniche Basin were cancelled on the same day.

The National Entity for the Fuel Market updated its online 'concession licences map' and removed four contracts located in the Peniche Basin where energy companies Repsol, Kosmos, Galp and Partex had expected to drill.

This is good news for the coastline between Lisbon and Oporto and for the general environmental movement which, slowly but surely, is affecting policy by stirring and then highlighting public opinion.

The Peniche Free of Oil movement had been pushing for this cancellation with a December 2016 petition lodged in parliament that demanded concessions, on land on at sea, were scrapped.

The current cancellations are the ones at sea, leaving the minnow energy company Australis with the Pombal and Batalha onshore concessions for which the Australian company has set a drilling date of January next year. A note issued to potential investors outlined the benefits of Portugal’s soft regulatory regime and low tax rates - (here)

The Peniche Free of Oil group stated, “in a year when we are experiencing extreme drought and the country has been damaged by the fires, we appeal to the Government's sense of responsibility to cancel all exploration and oil production contracts and seriously promote an energy transition to renewable energies. Our municipalities also have a relevant role in this area, promoting clean energies and adapting their areas and their services to a warmer climate with more frequent and severe droughts and extreme rains.”

The National Entity for the Fuel Market continues to operate in a secretive manner with media picking up major policy changes from an altered map on its website.

The Secretary of State for Energy, Jorge Seguro Sanches, has yet to make a statement on the cancellation of the concessions in the Peniche basin but as the law stands, the government can reissue concession contracts for the same areas, as and when it sees fit - indeed some inside sources state the contracts have only been suspended and will be renewed.

There has been little serious debate in parliament on the oil and gas exploration but time has helped activists and environmental groups to energise public opinion, especially when people are informed that the tax revenue from any on-stream oil or gas activity is paid to the State only after all costs are recovered by the concession holders, and at such a low rate as to have raised eyebrows across the international oil community.

For those wishing to question Australis on its plans for drilling and fracking on Portugal's mainland, here is your chance-

Australis Oil & Gas Investor Q&A Webinar

Australis Oil & Gas Limited (Australis or the Company) (ASX: ATS) is pleased to advise that the Company will host a live audio Investor Webinar session with the Managing Director Mr Ian Lusted on Friday 17 November 2017 at 9.00am AWST.

The webinar will include a brief company overview followed by a question and answer (“Q&A”) session. Questions may be submitted online during the webinar, or ahead of time via email to: contact@australisoil.com

An audio recording of the webinar will be available on the Australis website shortly after the session.

To join the webinar, please register online at URL
https://attendee.gotowebinar.com/register/819470800843743233

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Comments  

+1 #5 Denby 2017-11-12 14:26
Would advise that you read (Portugal corporate tax 2017) on oil and gas royalties. This may help to clear up some of the misunderstandings.
-2 #4 Ed 2017-11-12 10:48
Quoting Dirk:
Interesting, when someone who is uniformed (the writer) makes comments regarding business environment statements by Australis, interprets them as a weak Portuguese government, but in fact the financial terms in Portugal are very similar to countries like Canada, where more than 400 thousand wells have been drilled. Hmmmmm. And strangely enough Canadians live and work with the oil and gas industry in their backyards, the environment has not been decimated, and the oil and gas companies must work to strict regulatory rules. Do I support oil and gas drilling in Portugal? I don't know, because I have not looked at all the facts, the benefits and the risks. But what bothers me most is that uninformed and unknowledgeable people continue to publish information which is misleading or incorrect.


The fiscal regime that applies to the oil and gas industry in Canada consists of a combination of royalties and income taxation: Corporate income tax - federal corporate tax rate at 15% in 2015 and provincial corporate tax rates between 10% and 16% depending on the province. Crown royalties applicable to crown lands, at a rate of 10% to 45%.

Australis is allowed to 'recover all cost' and then pay between zero and 10%. If Australis reckons this deal is highly benefcial to Australis, can one not assume that the Portuguese government failed to represent the best intrests of its taxpayers? Admittedly, other of the concession deals were even poorer.
-1 #3 Dirk 2017-11-12 10:31
Interesting, when someone who is uniformed (the writer) makes comments regarding business environment statements by Australis, interprets them as a weak Portuguese government, but in fact the financial terms in Portugal are very similar to countries like Canada, where more than 400 thousand wells have been drilled. Hmmmmm. And strangely enough Canadians live and work with the oil and gas industry in their backyards, the environment has not been decimated, and the oil and gas companies must work to strict regulatory rules. Do I support oil and gas drilling in Portugal? I don't know, because I have not looked at all the facts, the benefits and the risks. But what bothers me most is that uninformed and unknowledgeable people continue to publish information which is misleading or incorrect.
+2 #2 Denby 2017-11-11 08:41
Portugal should be leading the way on renewable energy sources, as it has the necessary components available for solar and geothermal technology.
-3 #1 Peter Booker 2017-11-10 18:26
“in a year when we are experiencing extreme drought and the country has been damaged by the fires," yes, but how are these facts relevant to prospective oil drilling?

Yes to renewables, but my car won´t run on them. And what about the hydro power? With the drought, they have switch off these power plants. I suspect we in Portugal shall have to rely on carbon sourced energy for some time to come.

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