Legislation to ban offshore drilling close to the Italian coast is to come into force on August 26, forcing a number of small upstream companies, including the UK's Mediterranean Oil and Gas, to revise their exploration plans.
At the start of July, Italy approved a decree to ban offshore drilling within five miles of its coastline and 12 miles around the perimeter of protected marine parks in the wake of the BP Gulf of Mexico oil spill.
Mediterranean said in a statement Friday its Ombrina Mare field is located less than five miles from the coastline and therefore would likely be subject to the new laws.
The company's shares plummeted on the news, and by 09:00 GMT were down 17% at GBP0.20/share.
Despite the announcement of the legislation coming into effect,Mediterranean said it would look to clarify the exact nature of the law, in case there were exemptions it could use to continue drilling at Ombrina Mare.
"It remains unclear whether the decree operates to prohibit further development of the Ombrina Mare field," the company said.
"The company, in conjunction with legal counsel, is therefore investigating the legal position."
Mediterranean said it would also request clarification from the Italian authorities regarding the interpretation of the decree in relation to the Ombrina Mare project, and would not rule out challenging the legislation.
"Pending receipt of formal clarification, Mediterranean plans to continue the current environmental assessment procedure, with the aim of securing the production concession. In any event, should the environmental assessment process be adversely affected by the decree, Mediterranean will consider possible action to challenge the decree," the company said.
Italian environment minister, Stafania Prestigiacomo, said in July the government wanted to make sure of protecting the Italian environment in light
of the huge US Gulf of Mexico oil spill.
Other companies expected to be hit by the drilling ban are Ireland-based San Leon Energy and Petroceltic International, and the UK's Northern Petroleum.
At the start of July, Italy approved a decree to ban offshore drilling within five miles of its coastline and 12 miles around the perimeter of protected marine parks in the wake of the BP Gulf of Mexico oil spill.
Mediterranean said in a statement Friday its Ombrina Mare field is located less than five miles from the coastline and therefore would likely be subject to the new laws.
The company's shares plummeted on the news, and by 09:00 GMT were down 17% at GBP0.20/share.
Despite the announcement of the legislation coming into effect,Mediterranean said it would look to clarify the exact nature of the law, in case there were exemptions it could use to continue drilling at Ombrina Mare.
"It remains unclear whether the decree operates to prohibit further development of the Ombrina Mare field," the company said.
"The company, in conjunction with legal counsel, is therefore investigating the legal position."
Mediterranean said it would also request clarification from the Italian authorities regarding the interpretation of the decree in relation to the Ombrina Mare project, and would not rule out challenging the legislation.
"Pending receipt of formal clarification, Mediterranean plans to continue the current environmental assessment procedure, with the aim of securing the production concession. In any event, should the environmental assessment process be adversely affected by the decree, Mediterranean will consider possible action to challenge the decree," the company said.
Italian environment minister, Stafania Prestigiacomo, said in July the government wanted to make sure of protecting the Italian environment in light
of the huge US Gulf of Mexico oil spill.
Other companies expected to be hit by the drilling ban are Ireland-based San Leon Energy and Petroceltic International, and the UK's Northern Petroleum.
