Italy modifies offshore E&P restrictions

Italy’s government has eased restrictions on offshore exploration and production that were introduced in August 2010.

Offshore staff

ROME – Italy’s government has eased restrictions on offshore exploration and production that were introduced in August 2010.

According to Mediterranean Oil and Gas (MOG), Decree DL 83/2012 was published on June 26 in the Italian Official Journal. This states that the restrictions will now apply to activities up to 12 mi (19 km) offshore the Italian coastline.

However, they will no longer apply to:

  • Applications for production concessions under review at the time DLGS 128/2010 came into force, and any related or subsequent proceedings
  • Any titles, including exploration licenses already issued prior to DLGS 128/2010 coming into force
  • Any proceedings connected with or subsequent to such titles, including possible extensions of the same.

The changes appear to clear the way for MOG subsidiary Medoilgas Italia to request award of a production concession covering theOmbrina Mare oil and gas field in the central Adriatic Sea.

The original application and field development plan were submitted in December 2008 and received technical approval in June 2009. The company was completing the final stages of environmental approval when DLGS 128/2010 came into force.

Medoilgas’ existing production concession AC19.PI in the northern Adriatic, which contains various discoveries, is also excluded from the restrictions of the original decree.

The new decree also includes provision for an increase of 3% in royalty payable by offshore hydrocarbon producers. This would be allocated to the state budgets of the Ministry for the Environment, and the Ministry for Economic Development, to support monitoring and enforcement of marine environmental protection, and supervision of environmental safety for E&P offshore Italy.

Although the increase would impact profitability of Ombrina Mare and theproducing Guendalina field, where Medoilgas is a partner, both projects remain viable, the company says.

6/28/2012

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