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Italy's constitutional court gives green light to referendum on drilling

Published 19/01/2016, 20:04
Italy's constitutional court gives green light to referendum on drilling
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MILAN (Reuters) - Italy's constitutional court gave the green light on Tuesday to a national referendum on the duration of oil and gas drilling concessions in the country, muddying the waters for companies operating in the sector.

The referendum was requested by some regional governments and revolves around a law recently passed by parliament, as part of broader economic reforms, that states concessions already granted should last until the oilfield in question is depleted.

By doing this, the court said, the length of a concession had to all extents and purposes been extended.

According to rules in Italy's constitution, the referendum approved by the court should be held some time between April 15 and June 15.

Italy is keen to lure oil and gas producers to its shores to help stimulate stagnating output that has contributed to higher energy bills and dependence on imports.

But grassroots opposition to drilling and restrictive rules and regulations, including a 12-mile ban around coasts except for developers that already have permits in hand, has left investors lukewarm, stifling investment.

Some of Italy's regional governments are opposed to drilling platforms because of their impact on the environment and seismic stability.

Oil major Eni and Edison, controlled by French utility EDF (PA:EDF), are offshore leaders in Italy. Anglo-Dutch major Royal Dutch Shell (L:RDSa) and France's Total are also active in the country.

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