The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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John Leahy I take my hat of to you, well described. What a sad party ( the greens) I get the climate change bit but there is a bigger picture( ie) the good and well being of the nation. This resourse should be developed and when and only when the country is self sufficent in so called clean energy then is the time to phase out fossel fuel. Please dont be fooled by people saying the world dosent need Ngas. The WORLD needs fossel fuel for some time to come and if the greens dont get that then there are harder times ahead and they and Mr Ryan should be voted out of a job. Slan.
Letters
The Barryroe oil and gas field
A vital national energy source
Sir, – The distinct likelihood that Barryroe Offshore Energy, the owners of the Barryroe oil and gas field, will be forced into liquidation in a few weeks is a national catastrophe.
The reason for closing is because the Minister for the Environment, Eamon Ryan, has refused to grant a licence for further evaluation test drilling.
The Barryroe field, just off the coast of Cork, has been independently proven to have more than 300 million barrels of oil as well as copious quantities of high-grade natural gas which, if developed, would afford us backup energy security in conjunction with renewables well into the future.
The company has, over the years, failed to attract investors due mainly to the incoherent and irresponsible attitude of Irish governments, particularly in 2019 when they foolishly stopped issuing oil and gas exploration licences off our coast, and, still today, opposing an LNG facility at Shannon.
These decisions were driven by incomprehensible Green Party ideology, despite the fact that 100 per cent of our oil and over 80 per cent of gas is imported.
Our only native source at Corrib off the Mayo coast is fast dwindling, leaving our future energy security on a knife edge and at the mercy of volatile international markets.
Prolonged and becalmed weather last year and currently has exposed the Coalition’s naive policy of relying on offshore and onshore intermittent wind energy.
It is now generally accepted that over the next two decades, we will have to rely on oil, natural gas and coal as permanent backup to unreliable renewables.
It beggars belief therefore that Coalition strategy favours long-term imports of low-quality fuels from the UK over a proven “sweet” native source at Barryroe.
As we are now again awash with money, we could, and should, even at this late stage, follow Norway’s successful strategy and take equity in the Barryroe field, and in the national interest, support rather than hinder its development to full production in 2026.
This pragmatic strategy, while anathema to the Greens, would provide us with vital national energy security and avoid our exposure to international markets.
It would boost the economy, allow us to cease high-cost imports and, importantly, give us full control over supply and price for decades to come. – Yours, etc
JOHN LEAHY, Cork.
https://www.irishtimes.com/opinion/letters/2023/07/05/the-barryroe-oil-and-gas-field/?utm_source=dlvr.it&utm_medium=twitter
I wouldn't get too wrapped up in thoughts about fund raising dilution, the last two raises by Lansdowne have been restricted to circa 6 major shareholders and for modest amounts, I would suggest that approach will be followed again, as Lansdowne have very modest day to day running costs, which they are looking to trim further,
Plus, it would also appear there are no shortage of international litigation specialists lining up to work alongside Ashurst LLP, at no additional cost to Lansdowne,..GL S
I see your point about it appealing to his base but
I think the idea of taxpayers having to foot the bill for his decision amid a cost of living crisis while energy shortages hang over us will turn enough against him.
Having say that, the lack of movement in share price after Ahurst involvement and funders enthusiasm is disappointing. Maybe the dilution from upcoming fundraiser is the probable cause but there is no sign of the smart money moving in here yet
Ahurst’s involvement and funders enthusiasm proves their is a winnable case here but politically Ryan will love a public battle with an oil company coming up the next election to solidify his base . Martin and varadka are mice , the latter especially has been a huge disappointment.
A €100 m case is peanuts for the government but a €1b claim from taking over/merging with Barryroe would be a different situation
I agree. Also imagine press coverage of (a) high-profile case(s) two years down the line and concurrent power outages. Will people start throwing rotten eggs at Varadkar and Martin, our two mice men?
The Government won't want this going to trial; as a country that relies so heavily on foreign direct investment it's a bad look that a foreign company's ability to operate can be taken away by a single arbitrary decision of a minister. The damage to Irelands reputation as a business friendly country could end up in ruins. I hope all companies approaching the IDA about setting up in Ireland are asking about this!
I think your missing a big point here ... it's the Government ..not a two bit company that LOGP is taking a case against and that said government dos'nt give a tinkers about costs ...
The Irish Government have a lot more to lose than LOGP. Can they afford to take the risk of having to pay enormous legal fees + the kind of compensation Rockhopper received? By comparison, LOGP are not on a hiding to nothing. I do not think the government can possibly think they have a 50/50 chance of winning. The alacrity with which LOGP has been approached by several firms dispels that mistaken computation.
That commentary yesterday is very negative for LOGP. Any award will be almost certainly struck down as the court is 'unconstitutional' and will then have to go God knows where on appeal. Note also that the Department's line - we didn't trust that they could raise the money, comes against a very bad track record of raising finance and heading into bad conditions to raise finance (as firms have to show what percentage of lending is ESG compliant) i.e. the Department's defense is not completely without merit.
Ravenspads is more than a little optimistic in his assessment.......
Rockhopper took the Italian gov to court for failing to allow drilling to go ahead they wanted 33 million compensation and future loss of earnings they were awarded a staggering 8 times that amount 250 million with accrued interest also.. Ireland is expected to have a staggering surplus of 55 to 60 billion euros accrued over the next 6 years I'm sure nobody in Ireland would begrudge the shareholders here getting compensated preferably by arbitration taoiseach varadakar said all existing licences would be honoured so Mr Ryan will close the book here within 12 weeks and pay me my modest sum I invested in good faith the gov have far more pressing matters to deal with rte patients on trolleys lul cost of living crisis no housing sky high rents no electric car infrastructure etc etc coolmore stud had a big court case looming with a horse feed company before an out of court amicable settlement and I fully expect Mr Ryan to settle this quickly also
Part 3
However, the court also said that the government could avoid the need for a referendum on investor courts by amending the Arbitration Act 2010 to give the High Court additional powers to reject the decisions of investor courts. The government appears to have taken no action on this since the Supreme Court judgment late last year.
Boylan is taking a separate case against the Irish government challenging the very constitutionality of the Energy Charter Treaty itself, partly on the grounds established in the CETA case.
Then there is the politics, as the treaty comes under increasing scrutiny and the number of EU countries announcing their intended exit from it continues to mount.
Ireland has kept its powder dry so far on its intentions to either stay in or leave the Energy Charter Treaty, waiting instead to see how proposed treaty reforms may play out.
But with the first case notified to the Irish government last week, it may be too late for the state to avoid slugging it out with a fossil fuel company in the controversial investor courts it was warned about for so long.
Part 2
But the Department of the Environment explicitly told the Business Post that refusal of the licence had nothing to do with climate action and that the “phasing out of fossil fuels or our security of energy supply did not form part of the assessment process”.
Instead, the department said the Barryroe project did not meet the criteria to grant a licence, including the “technical competence of the applicant and the financial resources available to it”.
It is these issues that the case will likely hang on, if it goes ahead.
There is no doubt that Barryroe Offshore Energy (formerly Providence Resources) has struggled to raise sufficient funding and successfully commercialise the field over its more than 40-year history.
But the government could be faced with a chicken or egg argument, whereby the refusal of the licence may be used by the plaintiff as the reason why funding couldn’t be fully secured in the end.
Either way, the case will be significant legally and politically.
Ireland signed up to the Energy Charter Treaty in 1994, which was originally designed to protect investors in energy in post-Soviet states.
But growing litigation of decarbonisation plans under the treaty in recent years has fuelled concerns that it is now stifling climate action in Europe. So much so that the European Commission wrote to member states earlier this year saying that the “most adequate” option would be for the EU and its 27 member states to leave the treaty together.
Shock judgment
The Lansdowne case has another layer to it as it will involve the use of investor courts, which the Irish Supreme Court recently ruled were unconstitutional when it delivered a shock judgment against the Comprehensive Economic Trade Agreement (CETA) between Canada and the EU, taken by Patrick Costello, the Green Party TD.
Sunday Business Post - part 1
Daniel Murray: It was only a matter of time before Ireland was sued over energy treaty
Lansdowne Oil and Gas plc is to launch €100m proceedings against the state after Eamon Ryan refused to grant a further exploration licence for the Barryroe field.
The Irish government can’t say it wasn’t warned.
Notice of the first case by a fossil fuel company seeking damages under the Energy Charter Treaty last week was considered inevitable by some.
The treaty allows corporations to sue governments for policy decisions around energy – including climate-related decarbonisation plans – that might impact on their profits and their future profits. The treaty has become increasingly controversial in recent years, with multiple EU countries saying they are going to withdraw from it.
“It was only a matter of time before Ireland was sued,” said Lynn Boylan, the Sinn Féin senator.
Now Lansdowne Oil and Gas plc, a minority partner in the Barryroe oil and gas field off the coast of Cork, are using the treaty to seek up to €100 million in damages from the Irish state on the basis that Eamon Ryan, Minister for the Environment, refused to grant Barryroe a further exploration licence, resulting in a loss of potential future earnings by the company.
It would be fair to surmise that the parties to the Barryroe field might have their suspicions about Ryan’s real motives for rejecting the licence, given that he is the leader of the Green Party.
Brian Carey - The Times
Litigation funds line up to take on state over Barryroe
Lansdowne Oil & Gas approached by litigation funding firms over denial of right to work the Cork prospect
Lansdowne Oil & Gas says it will tap specialist litigation funders to finance its case against the Irish government over the decision to withdraw a licence to explore the Barryroe prospect off the Cork coast.
The exploration minnow owns 20 per cent of the prospect alongside Barryroe Offshore Energy (BOE), which controls the remaining 80 per cent stake.
A UK-domiciled company, Lansdowne is pursuing a claim through international arbitration pursuant to the investment protection regime of the Energy Charter treaty (ECT), to which both Ireland and the United Kingdom are signatories.
In its annual report, released last week, Lansdowne said that it had been approached by litigation funding firms and initial discussions were already under way, “with positive feedback thus far”.
Lansdowne’s legal advisers, Ashurst, initiated arbitration proceedings under the ECT by submitting a letter to the government, which requires it to participate in discussions with a view to settling the dispute. The government has three months to respond to a settlement offer.
The company said that it intended “to wait to see” the government’s response before looking to formalise litigation funding.
Eamon Ryan, the climate change minister, last month withdrew the licence citing concerns over the “financial capability” of the partners.
As an Irish-registered company, BOE does not have a right to pursue international arbitration under the ECT.
It is believed to be in talks with its largest shareholder, Vevan, an entity controlled by the businessman Larry Goodman, about mounting a possible judicial review. Vevan underwrote a loan note issuance of $40 million (€36.6 million) to prove the financial strength of the exploration partners.
BOE, as operating partner in the joint venture, had already commenced planning for drilling in 2024, in the expectation that it would be granted a lease undertaking to continue work on the prospect. The company had gone out to the market inquiring about rig availability in early May 2023.
Lansdowne has said it values its interest in Barryroe at up to $104 million. It said there was “clear evidence” of the Department of Environment, Climate and Communications and the minister “failing to act in a fair and equitable manner with the Barryroe Partners consistent with its obligations under Irish law and also international law”.
Anyone able of sharing the articles in the irish times and sunday business post?
Barryroe Lease Undertaking Application
Initiation of Arbitration Process under the Energy Charter Treaty ("ECT")
Source: https://www.londonstockexchange.com/news-article/LOGP/initiation-of-arbitration/16017104
Having just been through a successful arbitration process (we also have RKH shareholdings),....this leaves me feeling optimist, regarding our LOGP shareholding.
BW
Buy bey for £1 including tax rechargeable expenses for the agreement that bey get their expense percentage back out of the award if and when the court case is awarded to logp.
Bearing in mind that Logp originally spent the money before bey were involved (logp were around 60p per share then) and Bey took over the recoverables from that well as part of the deal. It is only the incompetence of bey that put logp where it is now.
Whilst it is part of the deal with BEY, it is not linked to Lansdowne in any way,….GL S
Well done Landsdowne.
Litigation is the only option.
Best he puts in his case with his lawyers then
Everybody is forgetting the San Leon 4.5% nett profit which is part of the Barryroe deal.
In the original Barryroe deal San Leon gave up its 30% equity in Barryroe to Providence in return for this as it was a zero cost.
About two years ago Oisin Fanning, CEO of San Leon, reckoned the value of the 4.5% nett profit at about $35m.
Being like a dog with a bone you can be sure Fanning will be looking for his pound of flesh if he can get it in any dealings with the government payout.
Barryroe assets not exola
If Barryroe goes into liquidation, what’s to stop logp purchasing exola , the 100% subsidiary of Barryroe that applied for the licence . It should be able to purchase it on the cheap from the liquidator and then put in a proper €1b claim , legals permitting