Italy’s Climate for E&P Improves, Amid Increasing Economic Difficulties

The climate for exploration activities in Italy is increasingly improving, as several companies reported they are moving forward with their plans. 

On Friday, Sound Oil wrote it received the final Environmental Impact Assessment approval from the Veneto Region in North-East Italy for its second Nervesa appraisal well.

"Nervesa remains a flagship project for Sound Oil with an estimated NPV10 of circa US$66 million. The drilling of the next well commences shortly and will signal the start of an exciting period of back-to-back drilling with the Badile well followed by both the SMG and Laura wells” James Parsons, Sound Oil's Chief Executive Officer, said in a note.

According to the company, the Italian Ministry of Economic Development should issue the drilling authorisation by the end of the year.

Despite these improvements, ENI’s subsidiary Saipem saw its credit rating downgraded on Wednesday, suggesting that large service companies are not set to benefit from the change in the political predisposition towards indigenous exploration and production in Italy. 

Saipem was affected by Russian decision to scrap the South Stream project. The Italian service company was in charge of the construction of the offshore segment from Russia to Bulgaria.

‘On 9 December 2014, the rating agency Standard & Poor’s downgraded Snam’s long-term credit rating by one notch, from BBB+ to BBB. The outlook moved from negative to stable’ the company wrote on its website, adding that the decision of Standard & Poor’s follow a similar decision on Italy’s sovereign long term rating, which was downgraded from BBB to BBB- with stable outlook.