The value of the former Taoiseach Mr Albert Reynolds' share options in Bula Resources increased to approximately £6 million yesterday following heavy trading in London, where the share price rose by more than 26 per cent.

However under the terms of the agreement whereby he can buy up to 87.5 million shares at 1p each, Mr Reynolds cannot exercise his first 35 million options until March of this year. He is restricted from exercising a further 35 million options until March 2001, and the remainder until September 2001.

Yesterday's sharp rise in the share price, to 6p sterling (7.8p) on the London exchange, following speculation in the British Daily Mirror newspaper of a significant oil and gas discovery in Libya. The share price added 26 per cent at the opening of trading and 63 million shares were traded. In Dublin the share price rose from just under 8 cents to 9.5 cents. Bula chief executive, Mr Tony Peart, said he would not comment on media speculation or the market activity.

At current prices Mr Reynolds could buy 87.5 million Bula shares at approximately £6 million less than their market value. However even though exercising some of the options becomes possible in two months, it is unlikely Mr Reynolds will do so.

At an e.g.m in May of last year Bula shareholders approved Mr Reynolds share option scheme which, the company said, was a special once-off arrangement. And at the a.g.m. in September shareholders heard that Mr Reynolds may receive a 3.75 per cent shareholding in an oil development in the western desert of Iraq.

Mr Reynolds told that meeting that his agreement with Bula consultant Mr Bill Griffin pre-dated the May e.g.m and was not relevant to his contract as chairman.

Last week Bula sold 54.57 million new shares at 3p sterling each, to raise £1.6 million sterling which it said it would use to finance its activities in North Africa and the Middle East. The investors who took up those shares have seen them double in value.

Late last year Mr Reynolds was involved in negotiations aimed at establishing a strategic partnership with Oilinvest, a Dutch based company which is 45 per cent owned by Libyan state entities.