PALP challenges in court latest decisions on oil well off Aljezur

The Algarve Livre de Petróleo Platform (PALP) filed its appeal on the 24th of May at the Court of Loulé […]

The Algarve Livre de Petróleo Platform (PALP) filed, on May 24, in the Court of Loulé, the challenge to the Reasoned Resolution of the Ministries of the Sea and Economy that raised the effects of Provisional Measure, also requesting the «declaration of ineffectiveness of the works that ENI and Galp carried out to prepare the hole».

PALP recalls that "in 2017, the Ministries of the Maritime and Economy presented a Reasoned Resolution pursuant to the provisions of paragraph 1 of article 128 of the CPTA".

This Resolution "was intended to assess the effects of the Provisional Measure submitted by PALP, allowing concessionaires ENI and Galp to carry out some work at the location where they intend to drill."

The PALP explains that "a Reasoned Resolution is a special administrative act with which the Government can assess the effects of a Provisional Measure, if it demonstrates and proves that they may be seriously harmful to the public interest."

The Platform argues, however, that "the Reasoned Resolution signed by the Ministers of the Sea and the Economy is based on a false foundation, which confuses the public with the private and which purposely omits certain aspects of the problem, which should indeed be considered for the purpose of assessing the public interest'.

The PALP summarizes what it considers to be “false arguments” used by the Ministries of Maritime and Economy in the Reasoned Resolution.

First, he says, “the Ministries argue that as a result of the Provisional Measure (PC) they would be unable to obtain counterparts that have a relevant economic and financial significance. This raises a very pertinent question: do the ministries themselves ignore what is contracted? That the counterparts will only occur in the production phase and after the concessionaires have recovered all, yes, all the research costs and the operational costs of production? Afterwards, the meager compensation will be 2%, 5% and 7% on the equivalent barrels of oil produced».

On the other hand, stresses the PALP, the two ministries “argue that the non-execution of prospecting can put an end to a “high risk” investment and mortgage the possibility of a future, more or less close. Which proves again that they intend to explore fossil fuels and not just research. How do you make this intention compatible with the commitments made to reduce the use of fossil fuels and mitigate climate change? The fight against climate change, especially in a particularly susceptible country like Portugal, yes, would be in the public interest and would certainly lead to many economic and social gains».

These ministries also state that “the investments in the survey are fully supported by the concessionaires, but they do not state that, as mentioned above, all costs will be subsequently reimbursed. Paragraph 2) of article 17, on page 15, of the Santola contract, explicitly states that “in case of discovery and once production has started, the Concessionaire after recovering the costs of research and development of the field(s)( s) oil and after discounting the operating costs of production, that is, when it reaches a positive net result, it will be obliged to pay (…)” such 2%, 5%, and 7% on the equivalent barrels of oil produced'.

The Ministries also state that “not doing the prospecting harms the public interest due to the loss of jobs. This argument again shows tremendous ignorance on the part of the Ministries; it is the concessionaire that writes “(…) The job opportunities generated by the project activities will be temporary, giving rise to a temporary impact on the local workforce and affecting only the recipients in the vicinity of the area […]”. After all, there are 30 people in temporary work for just 93 days. On the other hand, the potential effects on tourism and fishing could lead to a truly worrying loss of jobs”.

The Ministries also argue that this is a “geological investigation and that the hole will allow for mapping, cartography and scientific assessment. Raising the question again, are Ministries unaware of the Law and contracts?"

Because, underlines the PALP, «Decree-Law 109/94, in the introduction states that “The exercise of activities (prospecting, researching, developing and producing oil) is subject to a single title, in the form of an administrative contract of concession, covering all phases of activity"", "signed contracts are identified as "contracts for granting rights for prospecting, research, development and production of oil", the 4 phases of activity", "the ENI document - “Elements for prior assessment and decision to submit to EIA”, states that “Eni Portugal intends to assess the commercial feasibility of extracting hydrocarbons on the Atlantic coast of southwestern Portugal, in the Alentejo offshore basin, comprising three blocks: Lavagante, Santola and Gamba, in a total area of ​​4.546 km2».

In addition, "there are other state entities (universities, institutes, foundations) that also carry out research without provoking the risks involved in handing over an oil exploration contract to concessionaires, who, in addition, will keep the inconvenient information confidential."

According to the PALP, the ministries also state that “the methods for prospecting for oil are the same as for prospecting any geological resource. However, they do not know or pretend not to know that these activities are considered very dangerous, so much so that the European Community created a specific legal framework equating the prospecting phases with those of production - Directive 2013/30/EU of the European Parliament and of the Council, of 12th June 2013".

Another aspect mentioned by the ministries is, according to the PALP, “the investments made and the commitments assumed by the concessionaires. We ask: where are these expenses registered and supervised? In any case, the expenses and commitments of the concessionaires are not a public interest, but a private one».

Finally, stresses the Platform, "at the height of ridicule, they still contest the PALP's Provisional Measure, referring to it as the one filed "by the Municipality of Odemira"».

In conclusion, the Platform says it hopes that "the court takes a serious decision and inhibits the oil companies ENI and Galp from performing any other acts under that same contract under the suspensive effect of the injunction".