Ombrina Mare Project Development Stymied by New Drilling Ban

Junior oil firm Rockhopper Exploration said Wednesday that it is considering suing the government of Italy after it reintroduced an offshore drilling ban that prevents the company from developing its Ombrina Mare field, which lies offshore Italy in the central Adriatic Sea.

On January 6, Rockhopper confirmed the Ombrina Mare development was under threat after Italy's new Budget Law reintroduced restriction on offshore oil and gas activity, including a general ban on exploration and production activity within 12 nautical miles of the coast of the country. Wednesday saw Rockhopper confirm in a statement that it has now been informed by the Ministry of Economic Development that the production concession covering Ombrina Mare will now not be awarded, in spite of the project "having completed all the required technical and environment authorisations".

Rockhopper will retain its interest in the exploration permit covering the Ombrina Mare field area, but the company said it is now considering its options. These include a claim for damages and compensation against the Republic of Italy under international treaties that provide protection of foreign investments.

Rockhopper reiterated that none of its other interests in Italy, including the Guendalina gas field, is expected to be affected by the changes in legislation.