Italy: Bureaucracy Keeps Petroceltic Away from Drilling at Elsa Prospect

Activity on Petroceltic’s Elsa discovery, located in the Central Adriatic B.R268.RG permit, continues to be delayed due to uncertainties in the legal interpretation of Italian Legislative Decree L.D. 128, passed into law in  August 2010, which prohibits drilling in  the Italian seas within 5 nautical miles of the coastline and within 12 nautical miles around the perimeter of protected Marine and Coastal Parks.

This decree clearly states that it does not apply to ”existing titles”; however the impact of the law on existing exploration licences is as yet unclear.

In response to this uncertainty, Petroceltic has been seeking approval from the Ministry of Economic Development (“MSE”) to suspend the licence until these interpretation issues have been clarified. On March 1st 2011, the MSE signed the decree suspending the B.R268.RG permit. The decree will be published in the April edition of the Ministry’s monthly bulletin. Petroceltic and its partners have extended existing agreements pertaining to the farm-out of this permit, with the $26M of funding, raised for the drilling of the proposed Elsa-2 appraisal well, remaining available Brian O’Cathain, Chief Executive of Petroceltic, commented:

“These developments in the Carisio and Ronsecco permits represent a significant step forward in Petroceltic’s efforts to develop a portfolio of material oil prospects in Italy. ENI’s confirmation as Operator of Carisio will assist in the process of maturing the exciting Rovasenda prospect towards drilling, and may also create additional options with respect to the funding of the forward work program.”

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Source: Petroceltic, March 17, 2011