A saga between oil and gas explorer Gas2Grid (ASX: GGX) and the French Government has now been drawn out since 2013, prompting the company to instruct lawyers to launch legal action seeking $55 million in damages.
Currently trading with a market cap of just $5 million, the claim, if successful, would be one of the more remarkable means of cashing in their oil and gas assets located in France’s Aquitaine Basin.
The core of the claim centres around the St Griede exploration permit which was granted to Gas2Grid in 2008 for five years and due for renewal in 2013.
Having completed preliminary work under the terms of the permit, Gas2Grid applied for it to be renewed in January 2013 with the view of advancing the work program towards drilling of the well.
In a letter released to the ASX, Gas2Grid comment, “a first renewal is expected as a matter of course if the initial commitments have been met.” However, it was not until 2015 that the French Government decided not the grant the renewal.
The matter was subsequently escalated to a French Tribunal in Pau which overturned the Government’s decision not to renew the permit in November 2016, imposed a financial penalty of $626,550 be paid to Gas2Grid and extend the permit to 2021.
The saga didn’t end there however, with the French Government lodging an appeal at the Appeal Court of Bordeaux, the appeal was upheld and provided Gas2Grid just five more months to complete the work program planned work program.
The mining landscape in France has been a delicate one for explorers to manage with the French Government passing landmark legislation in 2017 to ban all oil and gas production in the country by 2040.
This has subsequently had a material impact on oil and gas explorers like Gas2Grid which believe they have “a good chance of success, based on legal advice,” on reaching a desired outcome having issued instruction for their French lawyers to lodge the €34.6 million (AUD $55m at current exchange rates) claim.