Italian PM Hopes to Attract $18 Billion Investment by Relaxing Offshore Oil Ban

After the Gulf of Mexico spill in 2010, Italy’s then Prime Minister, Sergio Berlusconi, put a ban on all offshore gas exploration in Italian waters, fearful of a similar disaster. The new Prime Minister, Mario Monti, in an attempt to stimulate the economy and aid the debt crisis, has proposed to relax the ban.

Companies such as Eni SpA (ENI), Edison SpA (EDN), and Royal Dutch Shell Plc (RDSA) will be permitted to return to shallow water projects within 7 miles of the Italian coast, which they had to abandon following the ban two years ago.

In his attempt to attract more oil and gas to the energy-poor nation Monti is ignoring environmental protestors, and pushing for his bill to be passed by parliament as soon as possible. Corrado Passera, the Economic Development Minister, believes that if successful, Italian offshore crude oil output could double within two years and attract as much as $18 billion in foreign investment.

Nicolo Sartori, an energy and defense analyst at Rome’s Institute for International Affairs, said that “the resumption of exploration activities won’t represent a game changer, but it will ease a situation of high dependence on imports and high prices.”

Passera claims that relaxing the ban could bring as many as 25,000 jobs to the desperate nation, and Brian O’Cathain, Chief Executive Officer of Petroceltic International Plc (PCI), has confirmed his belief that Monti’s energy plans could help boost Italy’s struggling economy. “There’s an enormous gas and oil potential in Italy, and the current government is quite keen on developing its indigenous resources,” he said.

The bill will allow firms to return to existing wells, but it won’t allow the drilling of any new ones.

By. James Burgess of Oilprice.com