Page 8 - Euroil Week 39 2019

EurOil INVESTMENT EurOil
Shell, Cabot exit Italian oil, gas project
ITALY
Cabot cited Italy’s moratorium on exploration activity.
ROYAL Dutch Shell and its London-listed jun- ior partner, Cabot Energy, have withdrawn from Italy’s Cascina Alberto block, with the latter reviewing its Italian operations in light of the government’s moratorium on drilling.
“While Cabot’s licences are in suspension, the company continues to review its Italian port- folio,” Cabot said in a stock filing on September 26. It said it was prepared to continue work at its offshore permits in the Adriatic and the Sicil- ian Channel once the suspension is lifted in 17 months, however.
“The withdrawal from the Po Valley Cascina Alberto exploration permit is consistent with our strategy to divest non-core assets to enable Cabot to focus funding and management time on the exploration upside within the rest of our Italian portfolio,” Cabot CEO Scott Aiken said.
Cascina Alberto covers 462 square km of acreage in southern Italy and is operated by Shell with an 80% stake, with Cabot owning the
remaining 20%. The pair filed an environment impact assessment (EIA) to collect 2D seismic data in December 2017 but have still not heard back from authorities.
Italy only produces enough gas to meet 7.5% of its demand, while its oil output covers 7.3% of consumption. Some experts claim the country could potentially produce much more of both, but red tape has scuppered exploration efforts.
Hopes for a revival of Italy’s upstream sector were dealt a blow when the government intro- duced its moratorium on exploration activity in February. It justified the move by saying Italy needed to reduce its carbon footprint and that oil and gas were not of strategic importance.
Shell has not commented on its exit from Cas- cina Alberto, but Cabot said it was due a payment from its partner for costs and inconveniences incurred as a result of the withdrawal. Outside Italy, Cabot is developing a light oil play in Can- ada. ™
POLICY
Bosnia renews search for oil, gas
BOSNIA
Bosnia has been striving for several years to initiate exploration, thus far without success.
BOSNIA’S Bosniak-Croat Federation is launch- ing another attempt to find investors to evaluate its oil and gas potential.
The Federation, one of two autonomous regions in Bosnia alongside the Serb Republic, intends to stage a tender in October for oil and gas production licences, its government said on September 27. It will invite bids for rights to four subsoil blocks spanning 4,591 square km of the Dinaridi and Pannonian basins.
The government will hold presentations for potential investors ahead of the contest, starting in Sarajevo on October 1, followed by Ankara, the Montenegrin coastal town of Budva and London. The presentations in London, likely to draw the most international interest, are sched- uled for October 8 and 9.
Potential investors will then have six months to file applications for the concessions. The bids will be evaluated by a government commission and London-based consultancy IHS Global, which was hired to assist with the tendering process in June.
Bosnia currently does not produce any oil or gas, with the bulk of its supplies coming from Russia. However, US and UK surveyors
identified several potential deposits prior to the 1992-1995 Bosnian war. Experts believe that the south of the country could hold up to 500mn tonnes (3.7bn barrels) of oil at depths of 4,000-8,000 metres, while a further 70mn tonnes (515mn barrels) potentially exists in its north.
Both the Federation and the Republic have sought to kick-start oil and gas exploration in recent years, but are yet to see results.
The Federation adopted a law on exploration and production activity in 2013, and passed a decree governing concession terms the follow- ing year. It held talks on granting a concession to Royal Dutch Shell, but the Anglo-Dutch major walked away without a deal in 2015, cit- ing low oil prices. Negotiations were also held with France’s Total, Australia’s Key Petroleum and UK-based Spectrum, but no commitments were made.
The Republic, meanwhile, granted a conces- sion in 2011 to Jadran Naftagaz, a joint venture between Russia’s Zarubezhneft and Serbia’s NIS, the latter a subsidiary of Russian state-owned Gazprom Neft. But the pair abandoned the project in 2016 after failing to find commercial quantities of hydrocarbons. ™
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