Exploration, development prospects brighten in Italy

Five Provinces of Italy's Valley Region [153,593 bytes]

Removal last year of Italian state firm ENI's monopoly in the prolific Po Valley play provides one of the best opportunities to gain access to prospective acreage in southern Europe, said Wood Mackenzie Consultants Ltd., Edinburgh.

Italy's government is reviewing applications made by ENI for licenses in the Po Valley area and intends to offer to other petroleum companies any licenses not awarded to ENI.

By yearend 1997, ENI had drilled more than 1,000 exploratory wells in the area and discovered several major oil and gas fields. Cumulative production to date amounts to 165 million bbl of oil and 6 tcf of gas.

License areas

Authorities have split the Po valley area into five provinces for the purpose of awarding licenses: Western South Alpine, Eastern South Alpine, Western Apennines, Central Apennines, and Eastern Apennines (see map).

Wood Mackenzie said ENI applied for 38 exploration permits, 49 development concessions, and eight underground storage licenses early this year.

These cover about half the total area of the former ENI monopoly area.

The government is expected to complete assessment of the Western Apennines and Central Apennines and Eastern South Alpine provinces soon.

"More than 30 oil companies have so far registered interest with the authorities in the Po Valley acreage," said Wood Mackenzie, "including all the majors apart from Texaco Inc. and many medium-sized and small independents."

Data rooms at the Milan office of ENI unit Agip SpA are open to interested companies so they can view the data acquired to date for the licenses on offer.

"When all the companies have had the opportunity to access the data," said Wood Mackenzie, "the authorities will open the application procedure, most likely some time in late February or March 1998. Applications for permits and concessions would then be accepted some months later."

Hydrocarbon prospects

The Western South Alpine is the most prolific of the five provinces, with a number of Tertiary gas and Mesozoic oil discoveries. Notable producers include the Villafortuna-Trecate, Gaggiano, Seregna, and Malossa oil fields and Caviaga, Pandino, Seresina, and Bordolano gas fields.

The Eastern South Alpine province is relatively underexplored. Several Tertiary gas fields have been found in the north and south of the province, but no Mesozoic fields.

The Western Apennines province is the least explored of the five, with all wells having targeted structural traps in Tertiary formations. Mesozoic levels have not been drilled here, and no discoveries have been made.

The Central Apennines province has been well explored in Tertiary clastic formations but virtually unexplored in Mesozoic carbonate layers, which are at great depths. Notable finds are Cortemaggione oil field and Cignone gas field.

The Eastern Apennines province is the most-explored of the five in Tertiary formations, while the Mesozoic layers have been explored in the western part of the area. Producing fields are Cavone and Bagnone oil fields and Ravenna, Alfonsine, and Spilamberto gas fields.

Po Valley prospects

"The Po Valley is believed to be prospective despite its maturity," said Wood Mackenzie. "The most attractive area for remaining oil prospects is probably around the Villafortuna-Trecate oil fields west of Milan, extending eastwards to the area around the Malossa oil field.

"Oil and associated gas are mainly located in structural traps in the Mesozoic carbonates. To identify such deep prospects, around 5,000-7,000 m, very good quality seismic data is required, while drilling is a lengthy and therefore costly operation.

"However, the size of any discovery could be substantial. Undrilled shallower gas prospects are believed to exist throughout the eastern half of the ex-ENI area."