PROVIDENCE Resources said it will delay controversial plans to drill for oil off Dalkey because the law is unclear.
The Irish oil company outraged the wealthy residents of the south-Dublin suburb when it got permission from the Department of the Environment to prospect for oil within view of the Dublin Bay.
Providence said yesterday it made the decision after it became clear that certain elements in European Union laws dating back to 1999 weren't transposed correctly into Irish law.
It has now handed back a licence to drill off Dalkey, although it will make a new application once the law has been clarified.
Planning Minister Jan O'Sullivan has said she will review the application.
Providence chief executive Tony O'Reilly said the delays were "frustrating" but the company remains "very excited" about the potential in this part of the Irish Sea.
Providence holds a 50pc stake in the site while a subsidiary of Malaysian oil and gas company Petronas owns the rest.
Davy Stockbrokers said before yesterday's announcement that the Dalkey Bay project has a 20pc chance of success.
"Whilst it is frustrating that this situation has arisen and caused a delay to our planned activities, we feel it is in the best interests for all concerned to surrender the licence and allow the Government to make the necessary amendments and we can then make a new application to carry out our planned programme," Mr O'Reilly said.
The licence was granted in September with 22 conditions aimed at environmental protection, nature conservation, protection of marine mammals and fishery resources, preservation of archaeology, navigational safety, and human health and safety.
Shares in Dublin-based Providence were the best performing on the Dublin stock exchange last year as the exploration company made a series of announcements. Shares closed down 0.6pc to €6.99 last night.
Providence is currently engaged in the most expensive and expansive drilling campaign in Irish history.
In July, the company revealed the discovery of more than a billion barrels of oil in the Barryroe field about 30 miles south off Cork.