State Government Faces $15 Million Compensation Bill from Drilling Company

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State Government Faces $15 Million Compensation Bill from Drilling CompanyThe move by Australia’s energy minister Anthony Roberts to stop drilling in a coal seam gas site may cost the state government about $15 million in compensation payments.

In May, Mr. Roberts stopped exploratory drilling activities by Metgasco in a site located in Bentley, near Lismore and forwarded the matter to ICAC, saying a company’s shareholder is somehow related to Labor powerbroker Eddie Obeid. However, ICAC concluded that there were no reasons to act on the issue.

Metgasco plans to file a lawsuit, with The Daily Telegraph saying a pre-court settlement estimated at $15 million likely to be paid out, citing government sources. A spokesman for Mr. Roberts acknowledged that the government is holding talks with Metgasco.

Peter Henderson, the CEO of Metgasco, said that the company’s share price fell 50 percent and that it had invested a huge sum of money in readiness for drilling when it was told to halt its activities. He also refuted any links with the Obeids and that “the most we know about the ICAC referral is our major shareholder ERM’s chairman worked with the nephew of Eddie Obeid in a sister company a number of years ago.”

Tony Bellas, the chairman of ERM Power, which owns Metgasco shares, was a shareholder of Gasfields Waste Water and Services, where he worked with Dennis Jabour, a nephew of Eddie Obeid. Mr. Bellas also acted as a director of Australian Water Queensland, a division of Australian Water Holdings that was associated with Liberal donor Nick Di Girolamo and which was put under scrutiny by ICAC.To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com