A Wiltshire-based oil company has said it is "disappointed" that Italy is seeking to annul a multimillion-pound compensation payout that was due to be made to the business after the country cancelled a major drilling project.
Aim-listed Rockhopper Exploration, which is headquartered in Salisbury, was awarded €190m (£162m) plus interest in damages from the Italian government in August. An arbitration panel unanimously decided Italy had breached its obligations under the Energy Charter Treaty over a decision to prevent the company from oil exploration along its coastline in 2015.
Last week, Italy submitted an application to arbitration institution International Centre for Settlement of Investment Disputes (ICSID) seeking to annul the award. The government also requested a provisional stay of the enforcement of the payout.
Rockhopper said it was now consulting with its legal representatives over what to do to contest the application. The firm said it had a non-binding offer in place to fund the fighting of the annulment and enforcing the award if required. The business said it would now consider this along with other funding possibilities.
A separate success fee of approximately £3m is due to its legal representatives on establishing liability and an award requiring Italy to pay more than €25m in damages. Rockhopper said the amount was not covered by either funding agreement.
Samuel Moody, chief executive of Rockhopper Exploration, said: "It is disappointing although perhaps not surprising that the Italian government has chosen to pursue an annulment of the award.
"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."
The annulment proceedings are expected to take between 18 and 24 months.
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