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Attorney General’s Office concludes: oil and gas concession contracts are valid

oilonshorerigThe Attorney General’s Office has decided that the two concession contracts awarded to Portfuel to explore for and extract oil and gas from two large areas of the Algarve’s land mass are valid.

The controversial contracts were awarded in the dying days of the Passos Coelho administration last autumn.

Portfuel was set up by local millionaire Sousa Cintra as a bid vehicle and therefore had no trading record or expertise in the oil and gas industry, an essential requirement for the concession award process.

Anti-oil activists tracked Sousa Cintra’s operation to a drilling site near Aljezur where a protracted ‘drilling for water’ exercise was producing suspicious fluids going on for months with a geologist on site.

Complaints from organisations, the public, the local mayor and Algarve mayors group AMAL led to the suspension of this drilling and the government requested the Attorney General’s Office to look into the process that led up to the uncontested award of these contracts.

The government has stood by its weak defence that it ‘only wants to see what oil and gas resources are out there’ despite having granted licenses for exploration and extraction, rather than for exploration drilling only.

The Attorney General’s Office report states that it is valid for the government to find out 'what lies beneath' as this is in the public interest and will help the government decide whether the Algarve, onshore and offshore, should become an oil and gas production zone, stick to tourism or try and develop a blend of the two industries.

This consultation document and legal opinion does not carry much weight but will be seized on by the oil companies, especially Portfuel whose intent remains to explore for resources and then to sell on its concession or develop a joint venture with a grown up oil company.

The anti-oil group ASMAA recently scored a major victory by setting up a public petition which, as it easily garnered the support of the necessary 4,000 signatories, forced a debate in parliament on July 1st resulting in five key policies:

  1. The immediate suspension of the development of oil and gas exploration by conventional or unconventional methods in the Algarve.  
  2. That EIA’s (Environmental Impact Assessments) be made obligatory from initial exploration phases.
  3. That EIA’s should be requested, so as to assess all oil & gas exploration and production risks, and identify risk mitigating or eliminating processes.
  4. Motivate a socio-economic study, with a special focus on impacts that oil exploration and production may have on economic sectors with a special focus on the tourism sector.
  5. That results of the assessment of all contracts be published; that should any irregularities be found then that the necessary steps be taken to rescind them; that the government shall retain all rights under its jurisdiction to take the appropriate measures required.

Political support for the anti-oil campaign is widening with only the former coalition government partners stubbornly pro-oil, the socialist government aware of the anti-oil feeling but stuck with concession contracts signed off before it came to power and the Greens, Communists and Left Bloc in support of turning investment in the Algarve from oil to renewable energy supplies.   

The July 1st start date for drilling in the ocean off Aljezur was postponed until August 3rd by the Minister of the Sea, giving the statutory consultation process an extra month, well aware that the public had not been given proper and timely access to documents, the companies involved, Galp and Italian State oil company ENI, had not submitted modern safety plans and that parliament was about to debate these issues on July 1st.

The hope is that the government, which could well do without a prolonged eco-fight in the Algarve, will analyse the original oil and gas concession contracts and look at the circumstances that led to their authorisation and the people behind the deals that by any standards, badly fail the public over safety, revenue and accountability.  


PALP later pointed out that
1. this is an opinion and not a court judgment

2. other opinions differ

3. this confirms that the government has signed contracts and did not fulfilled terms stipulated in Decree-Law 109/94 of 26 April, and in particular Article 11, Section 3;

4. this acknowledges that a government did not comply with legal requirements in terms of the higher interests of the country, namely the primacy of public interest over
private use