THE ITALIAN government has been ordered to pay €190m (£160m) to British oil and gas company Rockhopper Exploration over its decision to block the firm from drilling in the Adriatic Sea.

An arbitration hearing ruled that Italy's 2015 decision to block the Wiltshire fossil fuel company from drilling off its coastline contravened the international Energy Charter Treaty (ECT).

The country blocked Rockhopper's plans to build an oil rig off the coast of Adrazzo in Southern Italy, in line with a wider ban on all oil and gas exploration within five miles of Italy's coast.

First signed in 1994, the ECT sets out an international framework for crossborder cooperation in the energy sector, including procedures for settling disputes industry investors and ECT members states.

Although Italy officially withdrew from the ECT in 2016, the terms of the treaty let states and investors file claims against Italy until 2036, under a 20-year sunset clause.

Rockhopper chief executive Samuel Moody said the firm was "delighted" with the result, adding that the decision will have "very positive financial implications for Rockhopper".

Its case against Italy was financed by a specialist litigation funder, which took a 20 per cent cut of the settlement.

(c) 2022 City A.M., source Newspaper