Gas2Grid, which first applied for the western France permit in September 2006 with Gipplsand Offshore Petroleum, has originally hoped for approval to explore the vacant area in 2007, but was put through a two year application process.

Gippsland left the JV in 2011.

The basin is a proven hydrocarbon province with a long history of exploration and production, and over 13 trillion cubic feet of gas and 450 million barrels of liquids have been discovered to date, however exploration declined in the 1980s, particularly on the basin margins.

Gas2Grid was successful in securing an initial five year term, but after meeting all the work commitments the French government now says the permit will not be renewed.

The first term expired in early 2013.

"Normally, a first renewal is expected as a matter of course if the initial commitments have been met," Gas2Grid said.

"That application was processed by French government officials who recommended renewal and submitted it to the minister of energy for signature and issue. The renewal document has remained in the minister's office, along with many other licence renewals, for a very long time."

The second term would have moved to licence towards the drilling of a well.

The board, led by managing director Dennis Morton, met with high level French Government officials last Friday in Paris to follow up on the licence status, and were formally advised that the licence would not be renewed.

"We understand that the decision is based solely on local elected members' and ‘public disorder risk' considerations within the area where the licence is located," the company said.

"We note an inconsistency here with an approval being granted last year, by local authorities, for Gas2Grid to conduct a seismic acquisition survey with the aim to target a well location."

Gas2Grid had hoped to drill two cheap conventional wells in 2013-15 and 2018-19 after shooting 150km of new seismic.

To date it has processed some 5000km of aero-gravity survey and reprocessed and interpreted 740km of existing seismic data collected between 1960 and 1980.

Gas2Grid is seeking advice on its options regarding the recent decision. It could have an impact on three other licence applications the company has in the Aquitaine Basin: Tartas, Eauze and Mirande.

Tartas, having been fully processed, has been recommended for grant by French officials and is awaiting the energy minister's approval.

Eauze and Mirande have some more procedures to be carried out by the authorities before a recommendation for grant can be expected.

All three permits are close to St Griede.

French and Italian authorities have been increasingly refusing permit applications, particularly since the shale revolution.