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Oil Exploration: more dirty tricks from government and ENI/Galp on its way?

In the last few years and in many circumstances, the only time we can guarantee that there is no disinformation - not to call it lies – coming out of the mouths of politicians, is when they keep their mouths shut. It looks like that once again we are confronted with another blatant example of why politicians have no credibility left.

Background

On 29 October 2018 several media organizations, notably the daily Observer and the newspaper “O Sábado” published the news that the ENI / Galp consortium was abandonning their oil exploration projects off the coast of Alentejo. The announcement had been made early that Monday by the president of Galp, Carlos Gomes da Silva, during a press conference that was attended by several analysts.

By closing of that Monday, the Ministry of Environment confirmed to journalists that the ENI / Galp consortium had indeed submitted that same day a letter of waiver for their three oil exploration concessions, namely: " Santola "," Lavagante "and" Gamba ".

 

On November 26, 2018, ASMAA requested from the administrative and tax court of Loulé confirmation of above information. 

On December 12, 2018 The court sent an order requesting confirmation from the relevant parties.

On 20 December 2018, the Ministry of the Environment and Energy Transition replied to the Loulé Court that it was to their knowledge that Eni/Galp had indeed indicated an intention to abandon offshore drilling concessions, adding that 'this matter' was not straight forward or even linear, and is still under discussion. He went on to state that the matter was also subject to careful analysis, which is why there’s still no definite resolution. "and that" as a result all the above mentioned statements made by the concessionaries, were ONLY “Manifestations of Intent” in a labyrinthine process which is still in the administrative phase. "

On January 20, 2019, the Secretary of State for Energy João Galamba publicly said in response to a request for information made by PALP on December 27, 2018: "... that proof of the letter of cancelation presented by the Galp / ENI consortium to his office, will only be made available “publicly” once the contractual and procedural process was completed."

To date, Galp/ENI (the concessionaries) have failed to comment or provide clarification on this matter.

But one thing is sure, the responses of the Ministry of the Environment and the Secretary of State for Energy, clearly shows that both the government and the concessionaries are playing a game of “cat and mouse” with the population and other interested parties. It is clear that we are facing a situation managed by them that is ostensibly evasive if not intentionally misleading.

 

Facts we have taken into account

The Decree-Law 109/94, in its Article 63 regarding "Renunciation of concession areas" states in paragraph 1 that the concessionaries may waive all or part of a concession area. Additionally, the contracts in Article 3, mandates the return of at least 50% of the concession areas to the state.

The question we have to ask is:

Is it not what is being negotiated currently, for example what specific areas or percentage of the concessioned areas are being under consideration? In addition, the concessionaries can also argue for an extension of the contracts that expires on 30 January 2019, based on delays outside their control. Allowed for in their contracts under “Force majeure”!

 

But, not everything is dark, because in spite of the total lack of transparency in this process, we were very pleased to know that on 14 January 2019, the Court sent another order requiring that the Galp / ENI consortium clarifies their previous statement. They were given 5 working days to do so.

 

In Closing

We, ASMAA, like all of you, continue to await concrete responses in this latest episode of "ducking and diving" by the Ministry of Environment and Galp/ENI. But in the interium, we also continue to focus on having all our ducks in a row, for the preliminary court hearing scheduled for 11 February at 2:00 pm at the TAF in Loulé.

 

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