The first deep water oil well to be sunk off the Alentejo coast will be started this autumn or early in 2016, according to the Chief Executive of Galp.
The cost of the drilling is expected to be in excess of €90 million with the probability of success of 20%.
CEO Ferreira de Oliveira stressed that Galp has a contract with the Portuguese state that states that the drilling must take place between 2015 and 2016, or the rights will lapse.
The analysis of the seismic data is well advanced but the long term nature of the project means that oil or gas is not expected to be extracted for at least 15 years, explained the energy company boss.
Galp has 30% of the consortium led by Italian oil company ENI which bought its 70% stake from Petrogal, owned by Galp, along with the rights to explore three blocs off the Alentejo coast.
The original permits were awarded to Petrogal in 2007 but expired in October 2014. The Portuguese government gave the new partnership an extra year on the old contract taking it to October 2015.
Galp claimed already to have spent around €70 million in seismic analyses and sea bed studies in the Alentejo basin.
In the Algarve, Repsol and Partex are continuing to explore along the southern coastline. For both the Alentejo and Algarve offshore blocs the government decided that there was no need for environmental impact assessments as the oil exploration activity is too far offshore to come under land-based laws.
Portugal’s Partex, a fully owned subsidiary of the Calouste Gulbenkian Foundation will be drilling its first well off the Algarve coastline in 2015 despite the decline in the international price of oil. As in the Alentejo deal, the state will receive 9% of profits should oil or gas be extracted and should there be any profits.
The exploration areas lie between Quarteira and Vila Real Santo António south of the Ria Formosa protected area and gas flares on the rigs will be clearly visible from the shoreline.
The environmental aspects of potential oil and gas exploration and extraction are being handled by the oil companies themselves which has worried local eco-groups and the public but not enough to mount any well supported objections or protests.
Lagos based eco-campaign organisation ASMAA has set up an online petition with 6,397 signatories so far but compared to the spirited defence of the Canary Islands by the Spanish and a team of Greenpeace activists when threatened by Repsol, the Algarve and Alentejo populations either are not bothered or imagine that the drilling and extraction of hydrocarbons is a risk-free excercise where nothing could possibly go wrong.
If the Algarve and Alentejo thinks that it will benefit from oil-filled revenues these regions need to look at the deal where the oil companies have only to pay around 9% of profits to the state - profit, not turnover.
Any self-respecting multinational can shift profits to regimes of least tax impact and declare year after year of losses off Portugal's coastline.
The contracts were signed by a sucessive ministers in a political period where handing out exploration licenses for both onshore and offshore projects was seen as a way to save the state from doing any cost cutting, proving yet again the old adage that civil servants and politicians should be let nowhere near commercial contracts.
http://www.asmaa-algarve.org/index.php/en/campaigns/oil-and-gas-in-the-algarve/what-can-you-do
The ASMAA stance and petition is at this link: