Petroceltic seeks to amend Elsa well timetable

Petroceltic Italia has lodged an application with Italy’s Ministry of Economic Development to suspend the current timing of its commitments on the B.R268.RG permit in the Adriatic Sea.

Offshore staff

DUBLIN, Ireland -- Petroceltic Italia has lodged an application with Italy’s Ministry of Economic Development to suspend the current timing of its commitments on the B.R268.RG permit in the Adriatic Sea.

The action was prompted by uncertainty over the government’s proposed decree to restrict offshore drilling close to the Italian mainland. The proposed changes would prohibit drilling in seas within 5 nautical miles of Italy’s entire coastline and within 12 nautical miles around the perimeter of protected marine parks.

Under the terms of the permit and a recent farm-in agreement with Cygam Energy subsidiary Vega Oil, Petroceltic must spud the Elsa-2 appraisal well prior to Oct. 31.

However, the company says that given the continued legislative uncertainty, it cannot commit at present to a timetable to procure long lead items, nor to complete negotiations for a rig to drill prior to the spud date.

Petroceltic was expecting to spud Elsa-2 this fall in a location likely to be affected by the restrictions. Therefore the company has applied to have the permit suspension back-dated to April 16, 2010, the date of its last official correspondence on the environmental application took place.

The permit will remain suspended until the Ministry of Environment issues its decree of environmental compatibility for Petroceltic’s drilling program. Once this approval comes through, the company says it will have sufficient time remaining on the permit terms to drill the well.

In the meantime, Petroceltic plans to continue with the existing environmental permitting process.

Elsa-1, drilled by Agip in 1992, encountered a 65-m (213-ft) oil column in the Lower Cretaceous Maiolica formation at a depth of around 4,500 m (14,764 ft). Recoverable oil is estimated at 100 MMbbl.



07/20/2010

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