The island-based company behind plans to extract natural gas from the Manx seabed only needs to demonstrate it has the finances in place before it begins drilling, the Chief Minister told Tynwald.

Douglas North MHK Chris Thomas asked a series of questions about Crogga during the first sitting of Tynwald following the summer recess.

Crogga estimates sales of natural gas from the Crogga field off the coast of Maughold could generate £2.8bn in revenues and royalties for the Treasury.

Earlier this year, the company was granted a three-month extension to its licence while its application to vary it is considered by the Department of Infrastructure. This would allow it to drill an exploratory well based on a 2D survey rather than a 3D one as currently stipulated.

A decision is expected at the end of this month.

If it is granted, Crogga says it will restart fundraising with Manx residents and institutional investors for the £32.5m needed to drill the appraisal well.

In Tynwald, Mr Thomas asked the Chief Minister how much funding Crogga has raised to date.

He pressed Chief Minister Alfred Cannan on whether he knew who the institutional investors are.

Mr Cannan replied that Crogga does not have to give an update on its financial position and only needs to demonstrate it has the financial capacity before beginning work.

He told Tynwald: ‘I’m not in a position to advise on the amount of funding which Crogga has raised to date. The licence stipulates that before activities such as the well drilling and the 3D seismic can be commenced, the licensee must demonstrate to the satisfaction of the DoI that it has the financial capacity to undertake the work.’

He pointed out that those activities have yet to be approved and indeed it had not been suggested that they should commence.

Earlier Mr Thomas quizzed Infrastructure Minister Tim Crookall over how Crogga’s licence could be extended without all the information required for due diligence.

‘Is this in itself a fundamental failing in terms of due diligence?’ He asked.

‘I don’t believe it is,’ the Minister replied.

Mr Crookall said Crogga had supplied his department with ‘extensive supporting documentation’.

‘This exercise is ongoing including all assessments. Therefore I’m unable to comment on the findings and conclusions at this point in time. The short extension of the existing licence enables the department to continue its due diligence.

‘We have until the end of the month to make sure we have all the information before a decision is made.’

Replying to a question from Douglas South MHK Clare Christian, Mr Crookall confirmed Crogga hadn’t paid the licence fee for 2023 and 2024 but this had been agreed with the company pending a decision on the licence extension.