Donegal company to sue over gas decision

An Irish consortium has threatened to sue the Government after licences to explore for oil and gas off the coast of Donegal were awarded to Statoil, Shell and other foreign companies. By Frank Connolly

A Donegal-based consortium, which was last week refused a licence to explore for oil and gas off the northwest coast of Ireland, has threatened to take legal action over what it claims is unfair treatment by the Department of Communications, Marine and Natural Resources.

Grianán Energy Ltd applied for a licence to explore up to 70 blocks in the Slyne Erris field off the Donegal coast but were not among the successful applicants announced by Noel Dempsey, the Minister for Communications, Marine and Natural Resources on Saturday 19 August.

In a statement announcing the successful applicants, Dempsey said Grianán had not submitted a valid application because it did not include a detailed work programme or display the technical competence and offshore experience available to the company.

In a statement issued on behalf of the minister, the department also claimed that Grianán had failed to comply with a requirement that applications should "comprise areas that are equivalent to not less than one and not more than three complete blocks within the entire area" of 73 full- and 31 part-blocks in the Slyne Erris field.

Finance director for Grianán, Mark Turner, said that his company had submitted a detailed work programme and that he had personal experience of almost 20 years of work with the oil and gas industry in South America. He agreed that the company had made multiple applications to cover every block in the area but that other, successful, applicants had also made multiple applications, although in smaller quantities.

Village has obtained copies of the 12-point work programme submitted by Grianán Energy Ltd, including seismic analyses over two years to be carried out by independent consultants Monarch Geophysical Services, and subsequent drilling and development plans. The submission also includes a detailed CV for Mark Turner setting out his experience and expertise as well as health and safety and environmental policy statements.

"I was trained as an economist and I have the technical expertise deriving from 18 years of experience with major operators in South America where I was involved in licence applications and the preparation of oil and drilling contracts with various governments. Grianán deliberately submitted multiple applications because we wanted to ensure that as many blocks as possible were under the control of an Irish company. It may not have been strictly in the spirit of the process but it would be in the longer-term interests of the Irish public," Mark Turner told Village.

"We are consulting with our legal team to establish on what basis we can legally challenge this decision. We would hope to meet with the minister, Noel Dempsey, as soon as he returns from his holidays. We will also be in contact with the Joint Committee on Communications, Marine and Natural Resources, which only last month expressed wholehearted support for our efforts."

A delegation from Grianán Energy Ltd addressed the joint committee on 12 July last.

The successful applicants include Statoil (Ireland) with partners Shell E&P Ireland Ltd, who are currently engaged in controversy over the development of the Corrib gas pipeline off the coast of Co Mayo. Island Oil & Gas with Lundin Exploration BV were successful in two separate applications for three blocks each. In one of these applications Endeavour Energy (UK) Ltd are also included as partners. Also successful in the latest licensing round were British company, Serica (Energy) UK Ltd

According to Mark Turner, the exclusion of the only exclusively Irish applicants, Grianán Energy, will be challenged by the consortium which has publicly promised to reinvest 10 per cent of any profits it obtains from oil and gas production in the northwest.

The consortium also includes Donegal businessmen Martin McConnelogue, Noel Shortt, John McBrearty, Eamon Auld, Derek McLaughlin and Dermot McErlean.