Italy Moves to Boost Domestic Oil and Gas Production for Energy Security
Government Initiatives and Impact on the Energy Sector
By Giuseppe Fonte and Angelo Amante
New Measures to Increase Domestic Production
ROME, Sept 11 (Reuters) - Italy adopted measures on Thursday aimed at boosting domestic oil and gas production, Prime Minister Giorgia Meloni said, seeking to cut red tape for drilling licences and reduce dependence on fossil fuel imports.
Current Production Levels
Italy currently produces about 29 million barrels of crude oil a year, mainly in the southern region of Basilicata, and around 3 billion cubic metres of natural gas, covering only a small fraction of its fossil fuel needs, according to official data.
Prime Minister's Statement
"We want to move ahead with increasing domestic oil and gas production, because it makes little sense to buy this energy from abroad when we can also produce it here in Italy," Meloni said in a video message after a cabinet meeting.
Streamlining Permitting and Regulatory Processes
Appointment of Special Commissioners
To speed up permitting, the government said it would appoint special commissioners in cases where local authorities fail to take decisions on applications within the required timeframe.
Energy Minister's Remarks
"We are addressing an issue that can no longer be postponed: we cannot allow procedures that are strategic for the country's energy security to remain stalled for years because no decision has been taken," Energy Minister Gilberto Pichetto Fratin said.
Context: Energy Prices and Geopolitical Factors
Renewable Energy Projects vs. Fossil Fuel Output
The government had long considered appointing special commissioners to speed up renewable energy projects as the U.S.-Iran war pushed up energy prices, but ultimately took steps to boost fossil fuel output.
Global Supply Disruptions
The conflict has disrupted supplies through the Strait of Hormuz, which before the war carried about a fifth of the world's oil and liquefied natural gas supplies.
Italy's Energy Dependency and Financial Measures
Natural Gas Usage
Italy is heavily dependent on natural gas, which is used to produce almost half of its electricity, the highest proportion in the European Union, data showed.
Excise Duty Cuts and State Costs
Seeking to ease fuel prices, Meloni's government introduced a temporary cut in excise duties in March and has repeatedly extended the measure, including on Thursday.
The tax relief has so far cost the state more than €2.6 billion ($3.02 billion) when also including tax breaks for truck drivers.
Energy Import Costs
National fuel producers association UNEM said in June that Italy was expected to spend almost €60 billion this year to import energy, up €8 billion to €9 billion from 2025.
Key Players in Italy's Hydrocarbon Sector
Major Companies
Shell and TotalEnergies operate in Italy's hydrocarbon sector, along with state-controlled Eni.
Exchange Rate Information
($1 = 0.8615 euros)
(Reporting by Giuseppe Fonte and Angelo Amante. Editing by Mark Potter)
