MOG Hopeful of Progress on Italian Offshore Drilling Ban
by Jon Mainwaring
Friday, May 25, 2012
Italy-focused Mediterranean Oil and Gas is continuing to work with the Italian government to achieve a resolution of the status of its Ombrina Mare project. Speaking to Rigzone on Friday, MOG Chief Executive Bill Higgs said that there had been a number of positive developments to suggest that adjustments will be made to the offshore drilling ban that came with Italy's Legislative Decree No. 128 in the wake of the Deepwater Horizon incident.
DL 128, which came into force in August 2010, prohibited offshore exploration and production activities involving liquid hydrocarbons within five miles of the Italian coast. In addition, offshore activities within 12 miles of certain designated protected marine and coastal areas is also currently banned.
MOG's Ombrina Mare project, which contains certified P1 and P2 oil reserves of 40 million barrels as well as certified P1 and P2 gas reserves of 6.5 billion cubic feet, was affected by the decree.
"There were three positive developments in April and May – the first of which was the modification of the decree to allow the extension of existing exploration licenses and subsequently to that modification we were issued with a three-year extension to the exploration license that covers the Ombrina Mare discovery," said Higgs.
Another positive sign was Italy's prime minister in April issuing an energy statement, added Higgs. "In that energy policy statement he clearly indicates that Italy is going to have to develop all of its oil and gas assets, obviously in an environmentally prudent way, but it cannot afford not to develop all of those assets," he said.
"We do continue to meet and talk with the various representatives of the key authorities. I met with the senior undersecretary for the Minister of Economic Development in Rome last Friday night… and we continue to get very positive signals from them that they want to resolve this issue in a positive way to enable Ombrina Mare to go ahead," continued Higgs.
"We've spent EUR 23 million on Ombrina Mare and we're not going to, at the end of the day, just walk away from that," said Higgs – who stressed that the firm is not trying to build a company based on the Ombrina Mare asset alone, pointing out that MOG has several onshore assets in Italy.
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