MOG seeks clarification of Italy E&P ban

Italy’s government has formally approved a new legislative decree that prohibits offshore oil and gas activity close to the company’s coastline. It will come into force on Aug. 26.

Offshore staff

ROME -- Italy’s government has formally approved a new legislative decree that prohibits offshore oil and gas activity close to the company’s coastline. It will come into force on Aug. 26.

According to one of the affected parties, Mediterranean Oil & Gas (MOG), the decree will prohibit offshore exploration and production for liquid hydrocarbons within 5 mi (8 km) of the Italian coast, and also applies to ongoing authorization procedures for such activities.

The MOG-operated Ombrina Mare oil and gas field lies within the new boundary. The company believes there are exemptions to the decree which may be applicable, although it is unclear whether the decree prohibits further development of Ombrina Mare field.

MOG is investigating the legal position, and plans to request clarification from the Italian authorities regarding the interpretation of the decree in relation to the Ombrina Mare project.

Pending clarification, the company expects to continue its environmental assessment process, with a view to securing the production concession. Should this process be adversely affected by the decree, MOG says it will consider a possible legal challenge.

Concurrently, the Company is also evaluating alternative technical solutions for developing the field.

08/15/2010

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