Company produced plenty of news but little oil

Bula Resources, placed in liquidation by the High Court yesterday, produced a lot of headlines over the years but little gas and oil.

It was a company backed by lots of individual, usually long-suffering, shareholders as against institutions. It currently has about 43,000 shareholders.

In the late 1990s, the company was the subject of an inquiry by inspector Mr Lyndon McCann, who investigated matters to do with certain Bula shares and the company's disastrous involvement in a Siberian oil deal.

More recently the company was in the headlines in relation to a €1.5 million deposit paid by the company during the period Mr Albert Reynolds was chairman. The deposit was part of a deal involving an entity in Bahrain. The deal never went ahead but Bula never got its money back.

In his 1998 report, Mr McCann found that an earlier Bula chairman and managing director, Mr Jim Stanley, was the owner of a British Virgin Islands firm that was given Bula shares worth €3.1 million as a result of a deal set up by Mr Stanley. The shares were paid for a stake in a Russian oil field, which later turned out to be worthless.

Mr Stanley had been a figure associated with the company from its earliest days. The company placed in liquidation yesterday was incorporated in 1986 and acquired the share capital of a company called Bula Resources Public Ltd Co. Shares in the company were traded on the Unlisted Securities Market in Dublin and London.

By 1991, the company was launching itself on the Dublin and London stock exchanges proper. Despite the fact that the company rarely made any profits, people continued to back its various projects.

By 1993, the company was seeking out opportunities in Russia. Mr Stanley said he believed the opening up of the Soviet Union presented opportunities for oil companies which were quick to get involved and which could access western capital.

By 1995, Bula was entering into the deal put together by Mr Stanley and involving the transfer of 101 million shares to British Virgin Islands company Mir Oil.

In 1997 Mr Stanley suddenly resigned and soon afterwards left the State. The High Court froze trading in 74 million of the shares transferred to Mir, the others having already been sold on. Mr Stanley moved to Moscow and failed to meet the inspector appointed by the Tánaiste, Ms Harney, to investigate the whole affair. Mr McCann's report was published in July 1998.

All in all, Bula's foray into the Russian oil scene cost it €25 million.

In a subsequent interview with The Irish Times in Moscow, Mr Stanley disputed the inspector's report. An attempt by him to have a judicial review of the report failed in the High Court and an appeal against that ruling failed in the Supreme Court.

By 1999, there were reports that the company was in contact with the former Taoiseach, Mr Reynolds, regarding taking over the role of chairman. Around the same time the company was involved in trading in Iraqi oil as part of the UN oil for food programme.

At the time of Mr Reynold's appointment in 1999 it was stated that he had "extensive diplomatic relationships in the Middle East and North Africa". He was given options on 87.5 million penny shares.

There were reports during 2000, 2001 and 2002 of possible deals involving Libya and Iraq but none came to fruition.

In January 2002, Davy stockbrokers said it was resigning as brokers to Bula but would not comment further.

In April 2002, trading in the shares was suspended because of heavy trading and volatility in the share price. The stock exchange sought clarification about the company's financial position. The company lost three managing directors over a period of two years.

In September 2002, Mr Reynolds did not seek re-election at the company's annual general meeting. The meeting was dominated by concern about the "refundable deposit" placed in Bahrain in 2001.

The company was delisted in 2002. Yesterday it was placed in liquidation.