Oil and gas company Rockhopper Exploration said Monday that Italy was working to annul the August ruling by an arbitration panel under which Italy has to pay 190 million euros plus interest to Rockhopper for breaching its obligations related to the company's Ombrina Mare field in the Adriatic Sea.
The oil company - now mainly focused on Falkland Islands' Sea Lion project - started arbitration in March 2017 after Italy in 2016 imposed restrictions on offshore oil and gas operations in its waters within 12 miles of the coast of Italy, and after the country's Ministry of Economic Development of Italy informed Rockhopper Exploration that the production concession covering its Ombrina Mare field area would not be awarded, despite the Ombrina Mare project having completed all the required technical and environmental authorizations.
Ombrina Mare is an appraisal/development project situated in the shallow waters of the central Adriatic off the coast of Abruzzo, Italy.
Rockhopper in August said that the arbitration panel unanimously held that Italy had breached its obligations under the Energy Charter Treaty entitling Rockhopper to compensation.
The company at the time said that the award was final and binding on the parties, and that Italy had 120 days to apply for an annulment of the award, "which can only be annulled in limited circumstances."
However, Rockhopper said Monday that Italy had on October 28, 2022, submitted an application to the ICSID seeking to annul the Award under Article 52 of the ICSID Convention.
According to Rockhopper, Italy has also requested a provisional stay of the enforcement of the Award pursuant to Article 52(5) of the ICSID Convention.
"Rockhopper is consulting with its legal representatives as to what submissions will be required to contest this application," the company said.
Samuel Moody, CEO of Rockhopper Exploration, said:"It is disappointing although perhaps not surprising that the Italian government has chosen to pursue an annulment of the Award. Based on legal advice we believe annulment proceedings are likely to take approximately 18 to 24 months, albeit interest will commence accruing again in December 2022. We remain confident in the strength of our case, as was reflected in the unanimous decision underpinning the award in August, and very much hope and believe the annulment request will be rejected in due course.”
Rockhoppper said it had a non-binding offer in place to fund both fighting the annulment and enforcing the award if required. The company will now consider this along with other funding possibilities, the company said.