Portugal’s Environmental Agency gave its tacit approval on May 16 to a consortium of Galp Energia and Italy’s Eni (NYSE: E) to drill an oil exploration well off the Alentejo region’s coast, a project that environmental activists are trying to block.
It would mark the resumption of drilling in Portugal after a long hiatus, with opponents arguing the risks outweigh the chances of finding any significant quantities of oil.
The agency said it had not identified any potentially significant negative effects on the environment from the planned deepsea well, and would not order a specific study, which opponents of the project have been demanding.
Various local municipalities, politicians and activists have filed lawsuits and petitions to try and block oil exploration off the so-called Vicentine coast in Alentejo, which boasts beautiful beaches and a large natural park.
Several oil companies spudded a few dozen exploration wells in Portugal in the twentieth century, but all were either dry or showed just traces of hydrocarbons. Drilling activity petered out in the early 2000s, although seismic studies have continued.
Portugal’s Galp and its partner at the time, Brazil’s Petrobras (NYSE: PBR), won an exploration license in 2007 for three blocks in the Alentejo basin. Eni bought Petrobras’ share in the blocks in 2014.
The consortium hopes to drill the well in the last quarter of 2018 after the government last January extended the exploration period for a year.
The Expresso newspaper said last month an internal study by the consortium pointed to potential oil reserves of up to 1.5 billion barrels in the area, but the companies would not publicly confirm such estimates, saying they only expected to find hydrocarbons based on seismic studies.
Climate Action Network Europe last month named Portugal the winner of its 2018 European Fossil Fuel Subsidies anti-award for handing out the drilling license near its protected biodiversity area and a tourism hotspot and wasting taxpayers’ money on supporting dirty energy.