Northern undaunted by Italian drilling restrictions

Offshore staff

LONDON -- Northern Petroleum says Italy’s restrictions on nearshore drilling will have a limited impact on its planned operations.

The Environment Ministry issued a legislative decree last year covering liquid hydrocarbons activities within five nautical miles of the coast baseline, and all hydrocarbon activities within 12 nautical miles of a marine or coastal protected area.

Most of Northern's Italian E&P interests are further offshore.

Those permit areas that are affected included the eastern part of the G.R20.NP. in the west of Sicily thrust belt, close to the Tunisian boundary; and six applications for permit areas in the Ionian Sea.

In the absence of legislation, one of the immediate responses last year to the proposed changes by the Italian licensing authority was to impose a moratorium of the award of new offshore permits.

As a result, Northern's plans for a 2D seismic survey last fall were postponed. As of June 30, 2011, one year on from the initial announcement, no new Italian offshore permits have been issued.

Derek Musgrove, managing director of Northern, said: "One 2D and two 3D seismic surveys are in planning for the second half of 2011 on our southern Adriatic permits. This will allow not only for the progression of the Rovesti and Giove oil discoveries, which hold a combined 53.2 MMbbl of probable reserves, but also enable the de-risking of the significant exploration potential within these two permits.

"I am hopeful that further permit awards in the southern Adriatic may soon be forthcoming. Should this be the case, then Northern would expect to start planning additional seismic activity shortly thereafter.

"We continue to focus much of our human resources towards progressing the southern Adriatic, the west of Sicily thrust and fold belt where we are partnered with Shell, and the Sicily Channel and Ionian Sea areas. Our objective remains to enter into agreements to bring new partners into these areas."

07/15/2011



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