Italy closes door on new oil exploration

Itay will no longer grant concessions for the exploration and production of oil and condensate, a draft of a new government decree shows.

The decree, seen by Reuters, specifies that the ban on oil exploration and production will only apply to new concessions, not existing ones that have already obtained government approval.

The ban is part of Italy’s green ambitions, which include abandoning coal-fired electricity by the end of 2025 in favor of gas plants. To that end, Italy has approved four new gas-fired power plants in recent years, capable of producing 3,400 MW of power, and upgrades to existing plants are expected to add another 700 MW by 2026 as the country seeks to move away from gas entirely naturally supplied by Russia.

Oil exploration and production in Italy is primarily regulated by state law, operators do not hold any title to the exploration and production areas. The Italian government is owed a royalty of 10% for onshore oil production and 7% for offshore.

As it steps back from oil and gas exploration and production, Italy’s central bank is pushing for developed economies with higher emissions per capital to help developing economies transition away from fossil fuels, hoping to accelerate the launch of clean energy. The call for assistance, made by Bank Governor Fabio Panetta at the G7-IEA Ensuring an Orderly Energy Transition conference in Rome, would help reduce the overall cost of the energy transition globally, Panetta said.

But last week, Italy’s electricity company Enel abandoned plans to participate in Vietnam’s energy transition, deciding to leave the country’s wind and solar markets, which have been classified by a rather complicated connection mechanism to the network, which has determined even an Italy eager for transition. is not willing to deal.

By Julianne Geiger for Oilprice.com

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