The Italian Parliament has approved a Bill to suspend oil and gas operations for 18 months to enable government authorities to evaluate the suitability of exploration areas for sustainable hydrocarbon exploration and production activities (The Plan).
Under the new legislation it is intended that the Ministries of Economic Development and Environment review all areas in Italian onshore and offshore territories to determine which are suitable for sustainable hydrocarbon prospecting, exploration and development activities (E & P activities).
All areas will be assessed on the basis environment, social and economic suitability.
Offshore areas will be considered on the basis of potential ecosystem effects, in addition to impacts on sea routes, fishing and potential interference with the coastal communities. Any areas that are considered to be suitable for E & P activities will be able to resume.
Additionally, if ‘The Plan’ is not enacted within two years, activities will resume as normal.
The precise wording of the new law is expected to become available once it is published in the Official Government Gazette, which will occur once the President of Italy has approved and signed the new law.
Two ASX-listed oil and gas companies with operations in Italy are ADX Energy Ltd and Po Valley Energy Limited.
The news follows Po Valley’s recent report of identifying a maiden reserve of 13.3 billion cubic feet to their majority-owned onshore Selva gas field in northern Italy.
ADX anticipates that their d 363C.R-.AX permit offshore Sicily containing the Nilde oil field will be appropriately assessed to the E&P guidelines. Yet, the company has requested a reduction in permit area by approximately 55 per cent to minimise perceived impact.
The reduced area is expected to include the Nilde oil field, the Norma and Naila discoveries as well as the most prospective areas for future exploration.
On the positive side, it is believed that ‘The Plan’ could result in a more efficient framework for achieving environmental approvals for operations in pre-approved areas, which would greatly benefit national and international oil and gas companies.
Petroleum Australia anticipates that more information on this story is still to come.