Rockhopper Exploration plc will not receive the second tranche payment in its arbitration with Italy which has had the award annulled.
INSURANCE
The company, focused on the North Falkland Basin, said it intended to make a claim under its October 2024 insurance policy.
The proceedings relate to Italy’s 2015 ban on oil and gas exploration within 12 miles of the Italian coastline, which affected Rockhopper’s activities on Ombrina Mare oil field off the coast of Abruzzo.
In 2022 the International Centre for Settlement of Investment Disputes upheld that Italy had breached its obligations under the Energy Charter Treaty.
Rockhopper was due compensation of €190 million plus interest at EURIBOR + 4%, compounded annually from 29 January 2016 until time of payment.
The company received the first tranche while Italy subsequently applied to ICSID to annul the award under Article 52 of the ICSID Convention.
Rockhopper’s insurance policy ensures that it will receive the tranche two payment and the insurance payout combined, totalling “no less than €31 million”.
“The policy was placed via an FCA-registered specialist insurance brokerage,” said the company.
“The policy was underwritten by a specialist underwriting agency and subscribed to by a number of A-rated insurance carriers and syndicates.”
Chief executive Sam Moody added: “Obviously we are disappointed with this outcome.
“Having already received the tranche 1 monetisation payment our balance sheet remains robust and we intend to claim under the insurance policy.
“With a lead lending bank appointed, we now move to finalising the funding for Sea Lion FID [final investment decision] which has the potential to unlock very significant value as confirmed in our recently published resource evaluation.”