Exploration for oil and gas in Italy is about to undergo a major rebound.
With the recent award of exploration rights covering 60 blocks in Italy, E&D in that country is set to take off after lying nearly dormant for 2 years.
Leading the surge is a hot play in the Val d'Agri area near Potenza in southern Italy's Apennines. If recent estimates of reserves potential tapped by operators there are confirmed, Val d'Agri fields could double Italy's oil production.
That's the claim Agip SpA Chairman Guglielmo Moscato made at the annual meeting of the Italian Mining Association (IMA). Moscato also is IMA chairman.
Another E&D hotspot in Italy is likely to be the Upper Adriatic Sea, where Agip soon will begin a gas development program expected to add 1.05 tcf to Italy's reserves.
In other Italian E&D news, IMA's branch in Sicily will ask the government for a law to promote exploration in Sicily, which has been discouraged by what it calls outdated regulations.
Also on the meeting agenda was decommissioning of offshore platforms. By 2000, about 10% of Italy's 100 platforms will cease operations.
IMA wants Rome to provide tax exemptions and other fiscal incentives to promote investment in decommissioning. Prospects for decommissioning include using the idle platforms as possible regasification terminals to handle imports of liquefied natural gas or abandoning them to serve as artificial reefs for marine life, similar to the U.S. Gulf of Mexico's Rigs to Reefs program (see Journally Speaking, p. 21).
VAL D'AGRI PLAY
Six companies--Agip, Edison Gas, Enterprise plc, Lasmo plc, Fiat Rimi, and FINA Italiana SpA--have been active in the Val d'Agri play, which started with modest oil strikes during the 1960s.
The play picked up speed in the 1980s with the advent of improved seismic techniques. But it was the discovery of Tempa Rossa oil field in 1988 that really stirred interest in the area (see map, OGJ, Aug. 23, 1993, p. 53). A sidetrack to the discovery well flowed at a combined rate of more than 7,600 b/d of oil from three zones in 1992.
Agip's 1 Cerro Falcone wildcat flowed 600 b/d of 360 gravity oil early last year (OGJ, Feb. 1, 1943, p. 24). Agip affiliate Petrex found oil at Monte Alpi and Costa Lucana. Main pay zones in the area are Miocene and Cretaceous limestone and dolomite.
Petrex 1 Monte Alpi tapped 370 gravity oil at 3,606 m in carbonate rocks. A horizontal well, 2 Monte Alpi, found oil in the same age reservoir at a depth of 4,166 m. The 3 and 4 Monte Alpi exploratory wells were drilled about 20 km from Cerro Falcone, finding 300 gravity oil.
The first two Monte Alpi wells and the Cerro Falcone well are on stream, producing a combined 3,500 b/d.
By 1995, Val d'Agri area production is scheduled to climb to 7,000-8,000 b/d. A pipeline is planned from there to Taranto on the Ionic Sea. Although Agip says planning on that project is well advanced, IMA worries that a turf battle among local bureaucracies could delay work.
If all 15 companies receiving exploration rights covering 22 blocks in the Val d'Agri area spend according to plan, exploration outlays in the region could reach several hundred million dollars. And if Val d'Agri lives up to identified potential, it could become Italy's second biggest producing area after the Trecate area, which currently produces about 55,000 b/d.
Moscato estimated oil production in Italy then could jump to 200,000 b/d from the current level of about 100,000 b/d in 3-4 years.
Italy's crude and condensate production has risen about 8% this year from the same time a year ago.
