Australian company targets 'under-explored' gas in Portugal

LISBON (Reuters) - A search for hydrocarbons in Portugal's onshore Lusitanian basin could reveal enough natural gas to supply the whole country for two-and-a-half years, according to the boss of Australis Oil & Gas, which has exclusive rights to two concessions in the area.

"Portugal is relatively under-explored but there is a relatively high success rate," Chief Executive Ian Lusted told Reuters. "But to date there have been no sizeable findings and there is no hydrocarbon production at all in the country."

According to the company, which won an eight-year- exploration licence in 2015, a total of 148 onshore wells have been drilled in the country so far, with the majority being shallow wells of less than 500 metres.

However, from the wells already drilled in Batalha and Pombal in central Portugal - the two concessions owned by the company - there are indications of two working hydrocarbon systems.

"We had independent engineers who assessed that the recoverable volume was about two-and-a-half years of supply for the whole of Portugal," Lusted said. Portugal's natural gas consumption was estimated at 6.15 billion cubic meters (217.2 billion cu ft) in 2017.

"This is potentially very beneficial for the country and it ties up with government policy," Lusted added.

The government said early in December it was aiming for renewable energy sources to account for 80 percent of Portugal's energy by 2030, rising to 100 percent in 2050.

Environmentalists have expressed concerns about the natural gas project, even though it is a cleaner energy source than oil and could be used in a transition period as the country turns to renewables.

The drilling in the two areas could start in early 2020 but it still has to be assessed by environmental authorities.

Environmentalists also fear the Australian company could use an extraction process known as fracking, which has been criticised in some countries for disrupting local communities. Lusted denied this, saying the company would only be allowed to "drill a well and produce it conventionally".

In a petition signed by more than 5,000 people, local non-governmental organisation ASMAA wrote that "the concessions where Australis will drill include areas of high population density, and many areas of cultural and historical interest, as well as many nature reserves".

(Reporting by Catarina Demony; Editing by Axel Bugge and Mark Potter)