Government denies it is in breach of international treaty on Barryroe oil permit

The Irish Government has denied that it has breached any of the terms of an international energy treaty in a decision not to grant a permit for the further development of the Barryroe oil and gasfield off the Cork coast, according to the junior partner on the project.

UK-based Lansdowne Oil & Gas, which had a 20 per cent of the now lapsed Barryroe licence, said in May that it planned to use its right as an overseas company to pursue an international arbitration case under the Energy Charter Treaty (ECT).

The Republic of Ireland and the UK are both signatories to this almost 30-year treaty that established a framework for cross-Border co-operation in the energy industry, principally the fossil fuel sector.

Lansdowne indicated in May that it planned to seek at least $104 million (€97.4 million), its estimate of the net present value of its stake in the first development phase of Barryroe, after Minister for the Environment Eamon Ryan refused a licence extension on the field.

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Barryroe was found in 2012 to have at least 300 million barrels of recoverable oil and is estimated to have large gas reserves.

Lansdowne claims that the Minister failed to act “in a fair and equitable manner” with the Barryroe partners, as required under the ECT.

The Minister relied on a criterion in non-mandatory guidelines issued by his department in 2019 – that licence applicants should have net tangible assets of 3½ times the cost of planned works – in making his decision in May to refuse the permit.

Lansdowne said in a statement on Tuesday that it had received a letter on Monday from the Chief State Solicitor’s Office, on the eve of a three-month deadline in which the Government is obliged to try and settle the dispute amicably.

Lansdowne’s solicitors, Ashurst, formally notified the State on June 19th that it was taking the case.

The letter from the Chief State Solicitor’s Office “denies Lansdowne’s claim that the State has breached the terms of the ECT but indicates that they would be willing to give consideration to proposals for a meeting with a representative of the Department of the Environment, Climate and Communications”.

Lansdowne said that it is reviewing the letter and may seek a meeting.

“Whilst we are pleased to receive a response from Ireland to our letters setting out our claim under the ECT, the response has come right at the end of the three-month period allowed for the parties to seek an amicable settlement, not allowing any time for dialogue,” said Stephen Boldy, chief executive of Lansdowne.

“It has always been our hope that this matter could be settled amicably and we will continue to seek to achieve that, but with the three-month period elapsing today, the door is also open for us to move forward with formal arbitration proceedings.”