Italy: Decree Gives MOG Go Ahead for Ombrina Mare
Mediterranean Oil & Gas (MOG) has welcomed the clarification of an Italian offshore ban decree, which will enable the company to go ahead with its Ombrina Mare field.
The company was forced to stop work on the Italian offshore field in 2010, following the imposition of a ban on offshore activity within a 12-mile zone of protected Italian coasts. However, a governmental decree published yesterday in the Italian Official Journal has announced that the ban will not apply to any licences granted or licences applications under review before the ban was implemented.
Consequently, MOG subsidiary Medoilgas Italia will be able to apply for a production licence for the Ombrina Mare field, having first begun the application process in 2008, a result it welcomed today.
"We are very pleased that the Italian government has clarified that production concessions and exploration licences issued prior to the implementation of DLGS 128/2010 [coastal ban] are to be exempt from the offshore ban, subject to the decree being ratified by Parliament," CEO of MOG Bill Higgs said today. "Being able to continue with the development of the Ombrina Mare field is of strategic importance to the company, and a very positive step for both the company and for the local economy."
The changes to the decree will also see an additional levy imposed on those producers who fall outside the provisions of the 2010 ban with a 3 per cent royalty to be paid to the government. This royalty will go towards the state budgets of the Ministries for the Environment and Economic Development, to finance marine environmental monitoring, protection and supervision.
Despite the increased cost, which will impact upon both MOG's Guendalina field and the Ombrina Mare, should it be successful, the company says it supports the use of the royalty.
"The economics of both these assets remain viable and the company is supportive of the proposed uses of these funds for increased environmental protection offshore Italy," a statement for MOG said today.'
The decree must now be ratified in the Italian parliament in the next 60 days and may be changed within that period.