A Wiltshire oil and gas company has been awarded €190m (£162m) in damages from the Italian government after the country cancelled an oil rig project.
Salisbury-based Rockhopper will receive the cash, plus substantial interest, from Italy over a decision in 2015 to ban oil exploration near its coastline. Rockhopper was planning to build a rig in Abruzzo - a southern region of the country - but local campaigners had objected to the proposals, claiming it would destroy the environment.
The AIM-listed firm, which is based at 123 Castle Street, brought its case against the Italian government under the Energy Charter Treaty (ECT) in 2017. The ECT is an international agreement that grants corporations in the energy sector the power to sue states through international investment tribunals if governments take an action that impacts profits.
An arbitration panel unanimously agreed that Italy had breached its obligations under the ECT entitling Rockhopper to compensation. Although Italy has already exited the ECT, it can still be sued until 2036 under the treaty’s 20-year sunset clause.
The country has been given 120 days to apply for an annulment of the award, which can only be annulled in limited circumstances. Under a legal agreement with the Falkland Island Government, Rockhopper is prevented from making any form of distribution.
Samuel Moody, chief executive of Rockhopper, said the company was “delighted” to have won its case.
“A huge amount of work has been involved since we acquired Mediterranean Oil & Gas Plc in 2014 and commenced the Arbitration in 2017. I would like to pay tribute to our team for their dedication over such a long period.”
Mr Moody said Rockhopper would update the market “in due course” once it had analysed the results of the arbitration and the financial implications for the business.
He added: “We believe after collection of the award, it will make a material contribution towards our share of the development costs.”
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