MHKs have rejected a call for an urgent debate on plans by Crogga to drill for gas in Manx waters.

It comes after Crogga’s chief executive Richard Hubbard wrote to all Tynwald members warning that the company’s licence to operate in the Isle of Man's territorial waters was due to expire this coming Friday.

He said that unless there was movement from the Department of Infrastructure on a number of key points then the Crogga board did not see a way forward for the project.

‘If Crogga cannot proceed, the island will have lost the opportunity to explore a very valuable potential asset in its territorial waters,’ said Mr Hubbard.

In his letter to Tynwald members, he wrote: ‘Crogga is of the firm opinion that it has been placed in a commercially unreasonable position by the DoI.’

Onchan MHK Julie Edge’s motion on a ‘matter of urgent public importance’ called on the House of Keys to be of the opinion that DoI should put in place all necessary arrangements to support the fulfilment of the licence with Crogga.

But it was defeated by 15 votes to eight and the motion was not debated.

Crogga had estimated sales of 660 billion cubic feet of natural gas from the Crogga field off the coast of Maughold over the 19-year life of the field. It says this could generate £2.8bn in revenues and royalties for the Treasury and create net income of £2.5bn for Crogga shareholders.

In December, the company was granted a further two-month extension to its licence but withdrew its application to vary that licence to enable it to drill an exploratory based on a 2D seismic survey rather than a 3D one as stipulated.

Earlier that month, Crogga founder and former chief executive Diccen Sargent was awarded more than £130,000 after winning his tribunal claim against the company over unpaid salary. The company is appealing that decision.

Mr Hubbard told Tynwald members that Crogga had been pressing the DoI for up to date oil and gas regulations for almost seven years but to no avail.

At the same time, he said, the department was insisting that Crogga enters into a co-operation agreement with Orsted over the proposed Mooir Vannin offshore wind farm project. This would require them to notify the precise area of extraction by December 18, 2026.

‘This provides a very short window indeed for drilling of the appraisal well,’ he said.

Mr Hubbard said Crogga had been ‘forced’ into conducting a 3D seismic survey before it had drilled the appraisal well and determined that there is a commercial flow of gas to be exploited.

That surve will cost around £15m, he said, and Crogga had been refused a guarantee that it can recoup those costs if is unable to drill the appraisal well as a result of delays in putting in place the relevant legislation.

He added that the DoI had also refused a compensation process involving determination by an independent valuer - which he said placed Crogga ‘at the mercy’ of the Mooir Vannin developer.