LGO Energy reapplies to Spanish government for oil concession

9th Feb 2017 13:13

(ShareCast News) - Oil and gas firm LGO Energy has reapplied to the Spanish government to extend its concession in the country, after it was denied an extension in January.The La Lora concession, which has a carried value of £7m and is owned by the the company's subsidiary, Compañía Petrolífera de Sedano (CPS), was not granted an extension by the Spanish Ministry of Energy, Tourism and Digital Agenda and had to close operations in January.LGO Energy has initiated the process to extends its concession, which covers the Ayoluengo Field.Under European Union and Spanish law the offer of a new concession requires a public tender, where the previous concession holder has preferential treatment, therefore CPS hopes that the process will be expedited.The company also said that it was considering options to apply for a new concession on a sole basis or in partnership with third parties.LGO executive chairman Neil Ritson said: "LGO holds all the relevant data, experience, technical studies, staff expertise and oil field equipment needed to rapidly re-establish, and further develop, oil production operations at Ayoluengo. We hope that by moving quickly to establish the administrative requirement for a new concession the process can be completed quickly and our Spanish employees can return to paid employment as soon as possible."LGO previously said that CPS was in the final stages of a process to temporarily suspend all field operations and to complete the sale of all oil stocks from the Ayoluengo field by the end of the concession. Employment contracts for CPS's 17 staff were also suspended.The company said that it has actively sought an extension to the concession over the past four years and has carried out legal, technical and commercial evaluation work that was submitted to the Ministry in August 2015 in support of a formal request for a 20-year extension.Shares in LGO Energy were down 2.68% to 0.118p at 1306 GMT.