The Minister for the Environment and Energy Transition, João Pedro Matos Fernandes, has turned from monster into prince after his guarantee yesterday that, "no new oil exploration licences will be issued.”
This unconditional statement tops the earlier Socialist government pledge that no new licences will be issued ‘during the life of this government.’
What stopped Galp-ENI from carrying on wasting their money was deft legal opposition, adverse public opinion and sheer frustration that every movement the consortium made, usually sneakily and with government encouragement, was spotted, analysed and challenged by environmental organisations undoubtedly representing a majority of the Algarve region's population. See: GALP scraps Aljezur oil drilling project (29 October 2018)
"The existing conditions made it objectively impossible" to continue exploration activities, stated 'Minister of the Week,' João Pedro Matos Fernandes, after the head of Galp earlier had informed analysts that Galp, and de facto ENI, was pulling out of Portugal as far as exploration was concerned.
On a roll, the often deeply unpopular minister finished his ‘good news day’ by adding that, "there is no room for any compensation from the State," as Galp had pulled out, of its own free will.
“The administrative consequences will now be evaluated and it is already clear that there is no room for any compensation from the State," read a cheery briefing note from the Ministry, ‘the Galp-ENI consortium today filed a letter requesting the waiver of the exploration, research, development and production of oil concession contract for the areas known as Santola, Lavagante and Gamba.’
The consortium, majority owned by the Italian State oil company ENI, planned to start exploratory drilling for oil, between September and October this year but, citing "the existence of several legal proceedings in progress," threw in the towel.
This move has fallen in the Prime Minsiter's lap. With perfect political timing, with the 2019 ‘zero cost’ budget already sailing through the consultation process and PM António Costa already riding high in the polls, the government should be able to get its green energy credentials in order before next Autumn’s general election at which Costa aims to gain an absolute majority and shed his cumbersome Left Bloc support structure.
PALP, which along with ASMAA, pursued legal cases against the oil consortium, today sent a note to the press today, with the simple heading
‘ENI and Galp give up,’
... followed by, ‘A victory for the environment and for the Algarve, but the battle continues.’
PALP and ASMAA have the region's thanks for spearheading an anti-oil campaign that had the disadvantage of an opposition that clearly had political help and encouragement all the way along, an example being the dismissal of a 42,000 signature petition against the Aljezur test well, which simply was ignored.
PALP notes the remaining concession contracts, in favour of Australis Oil & Gas, for onshore gas drilling and points out that the current laws actively encourage and simplify oil and gas exploration in Portugal.
With unfortunate timing, in a briefing to investors dated 29 October, 2018, Australis states that,
"Australis is working with Portuguese Authorities to achieve the necessary regulatory approvals to commence exploration and appraisal activity
Australis has completed a number of detailed subsurface engineering studies to review historical data and establish the technical basis for a Batalha appraisal well.
The Jurassic prospect concept underlies the proposed Pombal exploration well for concession year 4
Appraisal and Exploration targets have been verified and assessed by independent engineers
Environmental Impact Assessment (EIA) - In late 2017, Australis engaged with the Portuguese Environmental Authorities to initiate the recently legislated regulations
The process is essentially split into three phases: - An assessment of the project for the applicability of an EIA - If required, the identification of the necessary scope of work - Once the EIA has been completed by the proponents, it is then assessed by the Authorities
Australis is presently awaiting feedback from the Portuguese Environmental Authorities on the applicability assessment Planned Operations
Australis plans to meet its Year 4 commitments by drilling two wells
Australis shares on Tuesday were down 16% from their October high point and its directors may well be assessing their chances of winning a long legal battle if their concession is cancelled as part of the government's emerging ‘Portugal's going green’ election platform.
