3rd Feb 2016 08:14
LONDON (Alliance News) - Rockhopper Exploration PLC Wednesday said it will not be awarded a production concession for the Ombrina Mare field offshore Italy and said it may claim for damages and compensation against the government as a result.
Rockhopper has secured all the required technical and environmental authorisations for the project but the Italian government recently approved propositions which included the reintroduction of restrictions on offshore oil and gas activity close to the coast, banning any exploration or production within 12 nautical miles of the coast.
Italy originally launched the restrictions back in 2010, but these were repealed in 2012 before being reinstated again officially from the start of 2016. The Ombrina Mare field lies within 12 nautical miles off the coast, and is therefore affected by the restrictions.
The company's exploration permit over the licence was suspended at the end of 2015 just before the new laws came into affect, but Italian authorities agreed to extend the suspension until the end of 2016 to give Rockhopper the opportunity to figure out what to do with the asset. That extension still remains in place.
On Wednesday, Rockhopper said the Ministry of Economic Development has confirmed the production concession covering the field will now not be awarded to the company due to those restrictions.
"The company is now considering its options which include both a claim for damages and compensation against the Republic of Italy under International Treaties for the protection of foreign investments, and in particular the arbitration process provided for under the Energy Charter Treaty," said Rockhopper in a statement.
Importantly, Rockhopper once again stressed that none of its other interests in Italy, including the offshore Guendalina gas field, are expected to be impacted by the new legislation.
Rockhopper shares were down 3.2% to 27.58 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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