"The government, and its independent departments, are, in no way prevented from cancelling the contract that the previous government authorised to be signed with Portfuel to prospect, almost half of the Algarve, for oil and gas,” said a statement from the office of the Secretary of State for Energy, Jorge Seguro Sanches.

The statement was issued on the same day as daily newspaper Público reported that the government had failed to block Sousa Cintra’s plans and that Portfuel still had a concession to survey and explore oil in the Algarve.

The Government also said it was keeping a close eye on all oil surveying and exploration contracts and that for this one in particular, it had requested “clarification” on two occasions from Attorney General’s Office, "for a decision that better defends the public interest."

Contacted by Lusa, the chairman of Portfuel, Sousa Contra, said he was continuing with the project and its studies adding he did not understand, “so much noise and trouble” surrounding a project that can “only be of benefit to Portugal.”

The onshore oil prospecting contract for the areas of Aljezur and Tavira, has raised some controversy around whether or not it includes provisions for exploration of the oil, if it is found.

A number of environmental groups have shown concern about the impact of oil prospecting and exploration in these areas.