LONDON (ShareCast) - (Sharecast News) - Global Petroleum updated shareholders on Friday, following the Italian government's proposed suspension of all hydrocarbon exploration activities, including permit applications , for a period of 18 months.
The AIM-traded firm said that under the proposed legislation, the Ministries of Economic Development and Environment would review all onshore and offshore areas for the stated purpose of evaluating their suitability for hydrocarbon exploration and development in future.

In doing so, the suitability of those activities in the context of social, industrial, urban, water resource and environmental factors would be evaluated.

Global Petroleum explained that in offshore areas, suitability would additionally be assessed having regard to the impact of such activity on the littoral environment, marine ecosystems and shipping routes.

Following the 18 month evaluation period, the intention was that a hydrocarbon plan would be activated, setting out a strategy for exploration and production - notably those areas to be excluded from future hydrocarbon exploitation.

Notwithstanding the 18 month moratorium, the company said it continued to regard its Adriatic application areas as potentially valuable assets and prospective for both oil and gas.

It said that all the judgements so far published regarding the appeals in relation to its Southern Adriatic applications had gone in its favour.

Of the remaining appeals, a further two were heard in January, with judgements awaited, and the balance were due to be heard in March.

Global Petroleum said it had been advised that the normal legal process would continue, adding that it expected the remaining appeals would also be rejected by the tribunal.

The company said it had been further advised that the losing appellants were unlikely to appeal further to the Council of State, in light of the suspension enacted by the new legislation.

While the court processes had been a "frustration", the board said, the conclusion of the proceedings was reportedly likely to overlap with the exploration moratorium such that Global believed that the practical impact on its operations would be less than the 18 month period that had been prescribed.

"The publication by the Italian government of a clear hydrocarbon plan would be a welcome development for all operators in the region although the coming 18 months is likely to be an uncertain period for the industry," said Global Petroleum chief executive officer Peter Hill.

"We are, to an extent, insulated from much of it pending the appeals process on our applications and our objective will be to bring this court process to a satisfactory conclusion before the end of the moratorium on exploration activities."

Hill said the board still believed that the permits Global had applied for contained "good prospectivity", adding that it remained of the view that in time its Italian assets could provide material upside for shareholders.

"Global intends to focus on the company's Namibian acreage where we are particularly excited about the prospects within our new Namibia Block 2011A, designated PEL 0094, located in the Walvis basin."

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