A legal battle between the Italian government and Rockhopper Exploration looks set to rage on for at least two more years, as the former seeks to clear the $190m price tag.
In an October 31 update, the UK-listed oil and gas explorer said the legal dispute could take 18 to 24 months, although it had successfully won an arbitration case in August .
The dispute is linked to the Ombrina Mare field, where Rockhopper failed to get final approval when Italy reinstated its nearshore exploration ban in 2015.
Rockhopper (LON: RKH ) previously said it expected to receive “significant amounts” on lost revenue as a result of the decision – a commitment it confirmed in August when it jointly announced the arbitral tribunal that Italy has violated its obligations under the Energy Treaty Treaty, is entitled to compensation.
The “final and binding” settlement awarded Rockhopper compensation of €190 million (£160m) plus interest at the Euro Interbank Offered Rate +4%, compounded annually from 29 January 2016 to just to pay time.
After payments by an independent arbitration panel, Rockhopper said it would keep 80% of the money.
However, the Italian delegation has 120 days to request an annulment and submit a motion accordingly on October 28, seeking to have the award annulled under Article 52 of the ICSID Convention, and also asking for a temporary stay.
The agency says it is currently in discussions with legal representatives about the information needed to pursue the cancellation request.
“Considering that Italy will try to cancel the Award, Rockhoppper has made an unconditional offer to pay money to fight the cancellation and enforce the Award if necessary. The company will now consider it and others bank account,” said in a statement.
The special successful award of £3 million was paid by the company’s legal representatives for establishing liability and an award demanding that Italy pay more than 25 million euros for damages, although the costs are not covered in financial contracts or proof.
Rockhopper said it is in “productive discussions” with its legal counsel about the fee.
Chief executive Samuel Moody said: “It is regrettable although perhaps not surprising that the Italian government has chosen to pursue the cancellation of the award.
“Based on regulatory guidance we believe that the liquidation process will take approximately 18 to 24 months, although revenue will resume in December 2022. We remain confident in the ability of our case, as seen in the unanimous decision in favor of the Award in August, and we sincerely hope and believe that the annulment request will be dismissed in due course.
Meanwhile, the firm raised nearly £2.8m over the summer as it looks to save money to progress the long-awaited Sea Lion initiative.
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