The current Minister of Economy has given the green light to the project to explore natural gas off the Algarve, which Manuel Pinho had put in the drawer, due to pressure from the tourism sector, reveals «Expresso» in its Saturday edition.
The newspaper adds that the contract between the Portuguese government and Repsol should be signed later this month.
The process of oil and gas exploration on the Portuguese coast began in July 2002, when, after a public tender launched by the Government at that time, 14 blocks were tendered for oil exploration in ultra-deep waters (deep offshore).
The Algarve coast is divided into two blocks – 13 and 14 – with only two interested parties having appeared: Repsol's Spaniards and RWE's Germans, who joined in a consortium in which the former hold 75% and the latter the remaining 25%.
Since 2002, however, the process has suffered delays and was eventually set aside by Economy Minister Manuel Pinho in 2007.
However, according to “Expresso”, the process was resumed by the current Government, having been taken over by the Secretary of State for Energy Henrique Gomes. The contracts with Repsol and RWE are expected to be signed later this month, probably on October 21st.
The contract provides for the initial concession period to be eight years, with the possibility of having two extensions of one year each. As for the production period, it will be 30 years, with minimum extensions of three years, up to a maximum of 15 years.
According to estimates already made, the gas from the Algarve offshore can be used for 10 to 15 years, allowing for annual energy savings in Portugal of around 1000 million euros.
A little over a year ago, in June 2010, the administrator of the oil company Partex criticized the government at the time for the impasse in researching natural gas in the Algarve, a region with sufficient reserves to cover Portugal's internal consumption for 15 years.
António Costa da Silva, who was speaking at the seminar «Prospecting and exploring natural gas in the deep waters of the Algarve coast: the energy, economic and environmental perspectives», in Loulé, pointed out that, 40 kilometers off the Algarve coast, there are gas reserves enough to cover Portugal's domestic consumption for 15 years.
The Algarve, according to published studies, has a high potential to generate gas, with a capacity around 20 times greater than the reserves found in the fields of the Gulf of Cádiz, in Spain.
"The country pays a high energy bill and we must not forget that about 15 percent has to do with natural gas imports," said the administrator of Partex, who belongs to the Calouste Gulbenkian Foundation.
"The Spaniards have been exploring natural gas since 1976 in the Gulf of Cadiz, but Portugal, in terms of its strategic positioning, has weaknesses and we cannot project the country for 20 to 30 to 50 years", he also lamented.
But the possibility of exploring for gas and oil off the Algarve has always motivated strong protests, both from the tourism and hotel sector in the region, and from some political circles, with the social-democratic deputy Mendes Bota being the most outspoken opponent.
In February 2006, for example, the Algarve deputy of the PSD even sent the President of the Republic Jorge Sampaio a letter, asking for his intervention in the case of oil in the Algarve.
Mendes Bota criticized, then, the fact that the Government of Sócrates was about to sign the concession contracts for the prospecting and exploration of hydrocarbons off the coast of the Algarve, «without having been provided the information publicly promised by the Minister of Economy and Innovation, when challenged in the Assembly of the Republic».
As early as December 2005, Bota defended that the exploration of gas and oil off the Algarve coast “puts the Algarve's tourist industry at risk, which is the country's real oil”.
Sustaining that any oil or natural gas exploration always entails an associated risk of environmental accidents, the deputy and then president of the PSD/Algarve noted that the decision "cannot be taken on the back of the region and the population, nor of their legitimate representatives" .
"The existence of environmental impact studies is unknown and no public debate has been held, as required by community legislation", Mendes Bota also noted, also criticizing the lack of a cost-benefit assessment for the country, which would eventually "allow conclude in favor of the oil industry, to the detriment of the tourist industry'.
The two oil exploration blocks that exist off the Algarve coast are curiously called the Lagosta and Lagostim Areas, and extend across the entire Ria Formosa Natural Park, from Quarteira to Monte Gordo.
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