The Italian Parliament has passed a bill to suspend oil and gas operations for 18 months while it assesses the suitability of areas for sustainable exploration and production.

ADX Energy (ASX:ADX) told investors on Wednesday morning that under the new legislation, the government will review all onshore and offshore areas to determine which are suitable for exploration and development.

The company has a permit in offshore Sicily that hosts the Nilde oil field.

It recently struck a deal to allow SDP Services to earn a 50 stake in the project to secure the necessary financial and operating firepower.

ADX had been embroiled in a dispute with Italian authorities over its ability to fund the project, but said recently that it had positive feedback from authorities regarding the farm-in.

However, the new law could potentially throw a spanner in the works for the Nilde project.

ADX wasn’t immediately available for comment at the time of publishing, but it did say it will be able to better assess the impact on the project once the “precise wording” of the new law is available.

That will happen once it has been approved and signed by the president, ADX said.

Another ASX-listed explorer with operations in Italy is Po Valley Energy (ASX:PVE).

But Po Valley chief Michael Masterman said Italy’s decision to suspend exploration permits will have no impact on its two main assets – the Selva and Teodorica gas fields.

“Both of those are advanced through the Italian approvals process and the recent amendments to the Italian law do not apply them,” he told Stockhead.

Po Valley last week reported a maiden reserve of 13.3 billion cubic feet (BCF) for the onshore Selva field.

That equates to 8.38 BCF of 2P reserves attributable to Po Valley’s 63 per cent stake in the field.

Typically ‘reserves’ refer to oil or gas discoveries that are commercially recoverable using existing technology while a resource is an initial, untested estimate. A 2P means it’s proven and probable, while a 3P includes ‘possible’.

The Selva field, near the historic city of Bologna, is due to start production in 2020 with targeted rates of 150,000 cubic metres per day.

Po Valley also has exploration licences in Italy, but says the review could actually be a good thing for explorers.

“The legislation doesn’t ban exploration, what it does is it provides for an 18-month period of time for the areas to be assessed from an environmental point of view, and we view that as positive with respect to our residual exploration licences,” Mr Masterman said.

“All licences including our exploration licences in the previous structure had to go through an environmental review.

“In the new legislation it’s just a different environmental review process, which potentially has the ability to lead to approvals on a similar timeframe if not faster.”

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