Code change threatens near-shore Italy drilling

Petroceltic International is concerned that new legislation could frustrate its plans to appraise the Elsa field in the Adriatic Sea.

Offshore staff

DUBLIN, Ireland -- Petroceltic International is concerned that new legislation could frustrate its plans to appraise the Elsa field in the Adriatic Sea.

The Environment Ministry has adopted an outline proposed decree to amend Italy’s Environmental Code. If passed, it would prohibit offshore drilling within 5 mi (8 km) of the Italian coastline and within 12 mi (19 km) around the perimeter of protected marine parks.

This restriction also would apply to permit applications currently pending, probably including the current location for the Elsa 2 well, which had been scheduled to spud this fall.

Petroceltic is seeking clarification on the process for adoption or rejection of the outline decree, and the validity of an immediate restriction of drilling operations.

Since the Elsa structure straddles the proposed 5-mi zone, Petroceltic is considering alternative well locations outside the proposed boundary.

In the meantime, the company plans to persevere with the existing environmental permit process. If the change comes into force, it would seek approval from the Ministry of Industry to suspend any license timing obligations in order to extend the Elsa 2 spud deadline.

AGIP drilled the Elsa-1 well discovery well in 1992, encountering a 65-m (213-ft) oil column in the Lower Cretaceous Maiolica formation at a depth of around 4,500 m (14,764 ft).

A TRACS Competent Person's Report issued this March estimated recoverable reserves in the region of 100 MMbbl, depending on oil gravity and viscosity.

07/01/2010

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