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Court decision threatens oilfield services operations

A demonstration against the halliburton facilities held in 2014

The administrative court has upheld an application by residents of Aradippou against the operation of Halliburton’s facilities in the area.

In a recent judgment, the court found in favour of the applicants, annulling the cabinet’s decision of September 10, 2014 by which a permit had been granted to Halliburton’s factory.

In January 2015 a group of 22 local residents filed a joint application against the cabinet decision, seeking a judgment that would declare the facilities illegal.

Locals were concerned that the operation of the Halliburton facilities were detrimental to the environment and to their health. The company’s premises are located 1km from residences.

Having earlier accepted that the applicants had legal standing, the court went into the substance of the case, concluding that the government at the time had broken the rules in giving Halliburton the green light to construct the factory.

It’s understood that since September 2014 Halliburton’s as well as Schlumberger’s facilities have been fully operational.

The two companies picked Cyprus for their base of operations in the eastern Mediterranean. Their first job was working with ENI-Kogas who drilled an exploratory gas well in offshore block 9.

Halliburton won the contract for drilling, cementing and completion of the ENI wells. Schlumberger’s contract with ENI involved carrying out logging and testing. Some of its logging tools use radioactive sources.

Both companies’ facilities are located just off the Kalo Chorio roundabout.

The residents were represented by the Christopher Larcou law firm.

In its decision, the administrative court accepted the applicants’ contention that the government had broken the law in granting a permit to Halliburton’s facility.

The factory is situated in an area designated for light industry by the Larnaca master plan – even though the facility’s operations consist of heavy industrial activity.

To get around that, the town planning department had asked the cabinet to approve a town planning authorisation by way of deviation from the Larnaca master plan. The cabinet was asked because the project is on state land. It okayed the authorisation.

However, permits or authorisations by way of deviation concern public projects alone – clearly not the case here.

By granting a town planning permit by way of deviation, authorities also bypassed the requirement for a public consultation with the affected communities.

Also, the court found that an environmental impact study had been necessary under the law. Such a study had not been carried out, with the government arguing in court that it was not mandatory in the case in question. The court said it was necessary, and moreover in its judgment said that it could not rule out the possibility of “deception” on the part of the government.

Government lawyers had tried to argue that an environmental study was not obligatory and that the assurances provided by Halliburton itself were sufficient. The court disagreed.

The case concerned the Halliburton premises only. Aradippou residents have filed a separate application against Schlumberger’s facilities. In the second case, the closing arguments have been heard and the court has adjourned pending the announcement of its decision.

The company can appeal the decision with the supreme court.

Larcou said the court also ordered that the planning permit granted to Halliburton be declared null and void – meaning the facility must stop operating.

He said the facility should also discontinue its operations regardless whether the administrative court’s ruling is appealed, and closed until a final judgment was delivered by the supreme court.

Asked to comment, energy analyst Charles Ellinas said: “We’ve got to be careful not to chase out companies investing in hydrocarbons and bringing jobs to Cyprus. Certainly companies should abide by all environmental regulations. In this particular case, Halliburton ought to be given the chance to correct prior permit irregularities, if any.”

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