Crunch talks for Petrel and Clontarf in Ghana

Whatever fears the oil and gas industry might have about possible changes to the fiscal regime in this country, Ireland is still in short trousers when it comes to the sort of governmental high jinks our exploration companies encounter on their travels abroad.

Just ask Petrel Resources and Clontarf Energy, both of which were founded by the industry veteran John Teeling.

Petrel and Clontarf yesterday announced they were in negotiations with the government and national oil corporation of Ghana to settle a row. Both companies could do with reaching a compromise.

The dispute concerns the alleged rowback of the Ghanian authorities on an agreement to award the Irish companies an exploration licence.

Clontarf, with 60 per cent of the licence, and Petrel, with 30 per cent, believed they had reached an agreement that would lead to the award of a licence in the Tano block about four years ago.

They have apparently already spent about $2 million assessing seismic data from the area.

The companies then learned from media reports in March that the Ghanaian government had awarded a new licence to the US company Camac, covering about one-third of the area that Petrel and Clontarf thought was theirs. The government has accused the Irish companies of not having fulfilled all of the terms of the deal.

The Irish companies got a court injunction against the Camac licence award in April, but the licence was signed into existence anyway, forcing Petrel and Clontarf to persevere with the legal route.

Yesterday’s negotiations came following overtures to the Ghanaian authorities by Petrel and Clontarf. The share prices of both companies have been battered since the dispute first arose in the spring: Petrel has fallen from above 17p to about 10p, while Clontarf has dipped below a penny to 0.7p.

Clontarf and Petrel hold few cards in the dispute as their licence hasn’t yet been validated by the Ghanaian parliament.

If both of them could retain even some sort of presence in Ghana following the talks, it would be a good result.