The Italian government plans to revoke a 2010 ban on offshore oil and gas drilling, permitting companies to start drilling operations within a 12-mile limit off the coast in "environmentally protected areas," Italian Senator Francesco Ferrante said in a telephone interview.
The offshore drilling restrictions were introduced in 2010 following the Macondo disaster in the Gulf of Mexico. Before the ban, the government had authorized €4.5 billion ($5.59 billion) of investment in offshore drilling. It banned these activities within five miles of the Italian coast and 12 miles off the protected areas.
The new measures are expected to lower the drilling threshold all around Italy to five miles from the coastline, Ferrante said. They could be introduced as early as this week, at the next cabinet meeting.
Once introduced by cabinet decree, the planned changes will come into effect after the Italian president signs off on the measures. However, they will require parliamentary approval to remain in force after an initial 60 days.
"There is talk that the introduction of these measures is very imminent," Ferrante of the center-left PD party said.
"If these changes are pushed through, we will obviously fight them when they come to the Senate for approval. Not only are they not particularly beneficial economically speaking, but they also pose significant environmental risk."
The center-right has a majority in both houses of parliament and tends to support the technocratic government of Prime Minister Mario Monti.
In recent months, oil and gas companies such as Eni and Edison, have pressed the government to review the law. Interest has also been expressed by foreign companies, including Shell and Ireland-based oil exploration company Petroceltic, in offshore drilling in Italy if the government were to lift the ban.
The planned changes would aim to boost local production of oil and gas, which has declined at a time when energy imports have become increasingly costly and vulnerable to disruption. The closure of the Swiss Transitgas and Libyan Green Stream pipelines over the past year as well as the moratorium on nuclear energy development highlight the country's need to boost production, the companies have said.
Italian economic development minister Corrado Passera has estimated the measures would give the government a windfall of €2 billion ($2.49 billion), Ferrante said. The funds would be useful for Italy, which entered a recession in the last quarter of 2011, and where the economy is expected to shrink 1.5% this year.
Government-introduced austerity measures worth €20 billion aimed at cutting government debt including tax increases and cuts in government spending on salaries and pensions have weighed down on economic growth in the eurozone's third-largest economy.
Alina Trabattoni
Platts
