Barryroe Offshore Energy (BOE) has said Minister for the Environment Eamon Ryan’s officials declined repeated attempts over the past two years to discuss the oil and gas explorer’s key Barryroe field before they pulled the plug on the prospect.
The comments were contained in an investor circular issued in recent days, ahead of an extraordinary general meeting (egm) on July 24th on a proposed liquidation of the company, if major shareholders decide not to put up money to keep the company running to pursue legal action against the Minister for refusing to grant a so-called lease undertaking on the Barryroe field.
They are at odds with a statement last month by the Department of the Environment that “extensive engagement” had taken place “over several years” between BOE and the department’s Geoscience Regulation Office over the application, before the Minister decided on May 19th not to allow further work on the project.
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“Since August 2021, the company has repeatedly sought to speak with officials from DECC [Department of Environment, Climate and Communications] in relation to the [lease undertaking] application,” said interim chairman Peter Newman in the circular.
“However, the last discussion between the company and DECC took place in July 2021 and, despite multiple written requests by the company since that date, no official from DECC has agreed to meet, or even to speak, with any representative of the company in the two years since then.”
The department did not respond to a request for comment. The Barryroe prospect, 50km off the Cork coast, was found more than a decade ago to have more than 300 million barrels of oil as well as gas resources.
BOE remains in talks with major shareholders — including beef tycoon Larry Goodman and businessman Nick Furlong — about the prospect of raising funds to keep BOE afloat. They have until the egm to commit such funds.
Mr Goodman and other significant shareholders had committed €40 million to cover the cost of the next phase of activity at Barryroe.
The Minister’s decision was based on the applicant not meeting its “investment cover criterion” in guidelines for offshore oil and gas exploration applications. The non-mandatory guidelines, issued in 2019, say licence applicants should have net tangible assets of 3½ times the cost of planned work.
BOE submitted an application in April 2021 for a permit to continue work on Barryroe, after its original 10-year licence on the field came to an end.
Alternative measures
The circular stated that BOE responded in August 2021 to an information request from the department the previous month. Its response acknowledged that, as an early-stage explorer, it had limited “tangible” net assets and that it would not expect to meet the 3½ times investment cover guideline, even once funding was raised for the work.
The 2019 guidelines also contemplate consideration of alternative measures to the investment cover criterion. BOE highlighted in its response to the department that it had a track record of raising equity over three decades, “including more than $270 million (€248 million) in the last 10 years, to pursue oil and gas exploration, most of that spent in Irish waters”.
Mr Newman said the failed effort to secure the BOE lease undertaking “has been an extremely disappointing and deeply frustrating time for shareholders, management and your board”.
He added that the Republic has now “lost an opportunity to improve Ireland’s energy security, to reduce the emissions associated with importing oil and gas, to provide employment and future tax revenues and to diversify the country’s sources of primary energy supply”.
