Oil and gas exploration company Providence Resources has surrendered its foreshore licence at an area of the Kish Bank Basin, near Dalkey, offshore Dublin.
Permission had been granted to Providence for surveying and drilling an exploration well there.
But the company said that the lack of clarity on its permission meant the company could have been subjected to ongoing legal challenges and undue delays.
In a statement, Providence said that after discussions with the Department of the Environment, Community and Local Government it became clear that there were certain elements of the EU's Environmental Impact Assessment Directive that were not transposed correctly in 1999 by the Irish Government.
Providence said that the lack of clarity meant that the foreshore licence, and subsequent exploration activities, could have been subjected to ongoing legal challenges and undue delays.
The statement said that the decision to surrender the licence now means that the Minister can move to amend planning and environment regulations thereby ensuring that the Irish regulatory framework complies with the EU Directive.
It said that once this is done the company would be in a position to submit a new application to progress operations in the Kish Bank area.
Providence's chief executive Tony O'Reilly said that the company had fully complied with all environmental and planning regulations in applying for and subsequently receiving the foreshore licence.
But, he said, failure to transpose EU legislation correctly into Irish Law by the Government over a decade ago, left the licence open to legal challenge, which could have resulted in undue delay in the Company carrying out its proposed activities.
"Whilst it is frustrating that this situation has arisen and caused a delay to our planned activities, we feel it is in the best interests for all concerned to surrender the licence and allow the Government to make the necessary amendments and we can then make a new application to carry out our planned programme,'' he added.