MOG Seeks Clarification on Ombrina Mare Project

Mediterranean Oil & Gas (MOG) will seek clarification from Italian authorities on how Italy's offshore drilling ban, which takes effect on Aug. 26, will impact MOG's Ombrina Mare project.

The decree amending the Italian Environmental Code prohibits exploration and production activities for liquid hydrocarbons within five miles of the Italian coast, and will apply to ongoing authorization procedures relating to those activities.

The Ombrina Mare oil and gas field is located less than five miles from the Italian coastline. However, the company believes there may be exemptions to the ban. The company will request clarification from the Italian authorities regarding the interpretation of the decree in relation to the Ombrina Mare project.

Pending receipt of formal clarification, MOG plans to continue the current environmental assessment procedure to secure the production concession. In any event, should the environmental assessment process be adversely affected by the decree, MOG will consider possible action to challenge the decree.

MOG also is evaluating the technical and economic feasibility of alternative solutions to develop the Ombrina Mare field.

Sergio Morandi, chief executive of MOG, commented, "MOG will continue to work actively with environmental and local authorities, as well as the Italian Government, with the aim of obtaining clarification on the decree and its interpretation, as well as identifying solutions enabling development of the Ombrina Mare field.

The Company remains committed to defending the significant investments which have already been undertaken by it at the Ombrina Mare field, assessing likely delays in obtaining all the residual ongoing authorizations, and bringing the Ombrina Mare field to production at the earliest opportunity.

"However, given publication of the decree, it is expected that issuance of the production concession will take longer than previously forecast," MOG said in a statement.