Petroceltic will await outcome of talks over Adriatic drilling
THE UK government will make representations to Italy to allow the resumption of offshore drilling in the Adriatic Sea, in a move that could have big ramifications for Irish firm Petroceltic.
Britain's prime minister David Cameron is expected to raise the subject with his Italian counterpart Enrico Letta when the latter visits Downing Street tomorrow.
Italy has around 40 million barrels of oil and as much as 6.5 billion cubic feet of natural gas sitting off the Italian coast.
Offshore drilling was banned by Italy along with many other countries after the Deepwater Horizon disaster in the Gulf of Mexico in 2010. Since then, however, many states have lifted the ban.
Italy also lifted its ban at a federal level, but restrictions have remained in municipal law. With local elections next year, politicians apparently looking to burnish their green credentials are extremely reluctant to support the resumption of offshore drilling.
Ostensibly, Mr Cameron will be supporting a British firm, Mediterranean Oil and Gas in his meeting tomorrow – but his actions are being closely watched by the entire exploration industry with any interest in Italy.
Petroceltic has had a strong presence in Italy since 2005. It has four permits onshore, but crucially, has another five permits in the central Adriatic and Abruzzo area.
The problems facing Petroceltic and others in the region are especially frustrating as the physical conditions are much more benign than elsewhere in Europe, such as the Dunquinn licence off the west coast of Ireland.
Petroceltic declined to comment yesterday. Company shares rose 1.3pc in London.