In Italy, hydrocarbons in the subsoil and on the continental shelf form part of the State’s mineral estate; they are not privately owned merely because they lie beneath privately owned land, and ownership of the surface confers no title to the underlying deposits. Under Royal Decree No 1443 of 29 July 1927 and subsequent mining legislation, all mineral resources, including hydrocarbons, belong to the state patrimony. Exploration and production rights are conferred exclusively through public-law mining titles issued by the competent state authority, namely prospecting or exploration permits and production concessions, so that the regime is one of concession and licensing rather than private mineral ownership or leasehold. Regions and local authorities own no hydrocarbons, but they participate in administrative procedures, environmental assessment, land-use planning and certain revenue-sharing mechanisms. Offshore activities beyond the territorial sea fall under exclusive state jurisdiction on the continental shelf and are constrained by statutory exclusion zones, including under Article 6(17) of Legislative Decree No 152/2006.

The principal national authority for upstream hydrocarbons is the Ministry of the Environment and Energy Security (MASE), which inherited the sector from the former Ministry of Economic Development. Decree-Law No 152/2021 consolidated within MASE the mining-licence functions formerly exercised by the Ministry of the Environment and the Ministry of Economic Development, alongside national energy policy, energy security and the management of subsoil resources. Within MASE, the national mining office UNMIG grants exploration, production and gas-storage titles and exercises technical, safety and environmental control, monitoring and decommissioning oversight, assisted by the Commission for Hydrocarbons and Mineral Resources (CIRM), an advisory technical body under Presidential Decree No 78/2007. Since 1998, competence for geothermal concessions of national relevance has been delegated to the Regions, acting with UNMIG and CIRM. ARERA regulates the economic aspects of the gas sector, including third-party access and tariffs for networks, storage and related infrastructure, while environmental permitting and EIA are handled by MASE for projects of state competence and by regional and local authorities for others. Competition falls to the AGCM, listed-company and market-disclosure matters to CONSOB, and customs, excise and taxation to the Customs and Monopolies Agency (ADM) and the Revenue Agency.

Italy has no national oil or gas company holding exclusive statutory rights over exploration, production, transport, refining or marketing. The exclusive regime once enjoyed by Ente Nazionale Idrocarburi (ENI) under Law No 136/1953 ceased on 1 January 1997 pursuant to Article 23 of Legislative Decree No 625/1996. Eni S.p.A. remains the principal Italian operator but acts as a listed commercial undertaking without any general legal monopoly across the value chain. The State retains a significant shareholding influence, exercised through the Ministry of Economy and Finance and the state-controlled Cassa Depositi e Prestiti S.p.A. (CDP), which together hold approximately 30.5% of Eni.

The core upstream statute is Legislative Decree No 625 of 25 November 1996, implementing EU Directive 94/22/EC, which governs the granting and exercise of authorisations for hydrocarbon prospection, exploration and production across the national territory, the territorial sea and the continental shelf. It superseded earlier legislation, including Royal Decree No 1443/1927, Law No 6/1957, Law No 613/1967 and Law No 9/1991, though titles granted under prior law survive until expiry and Law No 9/1991 remains central to national energy planning. Presidential Decree No 484/1994 governs the permit and concession procedures, Legislative Decree No 624/1996 addresses worker health and safety and major-hazard prevention, and the Directorate Decree of 15 July 2015 specifies operators’ technical, financial and bond-security requirements; geothermal resources are now governed by Legislative Decree No 22/2010, and environmental matters principally by Legislative Decree No 152/2006 (the Environmental Code), whose Article 6(17) constrains offshore activity.

A central planning instrument is the Sustainable Energy Transition Plan for Eligible Areas (PiTESAI), introduced by Article 11-ter of Decree-Law No 135/2018 and approved by MASE Decree No 548/2021, which classifies areas through a hierarchy of absolute constraints (statutory prohibitions, protected areas and offshore exclusion zones), additional exclusion constraints (environmental, landscape, cultural and socio-economic) and “attention” constraints requiring site-specific assessment. Its scope covers 42.5% of the onshore territory and only 5% of the marine area, and within it new prospecting and exploration are admissible only in potentially suitable areas and exclusively for gas.

Existing titles and pending proceedings continue on detailed criteria keyed to gas objectives, filing after 1 January 2010, location in suitable areas and defined periods of inactivity attributable to the holder, while concession applications may proceed in unsuitable areas only where a proven gas reserve exceeding 150 million standard cubic metres of public interest is ascertained; new titles are prohibited in protected marine and coastal areas and within twelve miles of the coastline. The Plan is dynamic and reviewed every five years, and following its partial annulment by the TAR Lazio, later legislation has preserved many of its spatial restrictions. Italy has no pooling or unitisation rules comparable to common-law systems, but Article 13(4) of Legislative Decree No 625/1996 permits holders of contiguous concessions to seek unification or modification of boundaries to rationalise reservoir exploitation, with co-ordination otherwise governed by the title, the approved work programme and UNMIG requirements.

Private investment in upstream hydrocarbons is permitted exclusively through public-law titles granted by the State, namely prospection permits (permessi di prospezione) authorising preliminary surveys, exploration permits (permessi di ricerca) granting exclusive rights over a defined area, and production concessions (concessioni di coltivazione) conferring the right to develop and produce from a discovered field. A “single concession title” (titolo concessorio unico) has also been used for certain integrated exploration-and-production procedures. Rights are acquired from the State through administrative titles rather than from private landowners, and the production concession is granted to an exploration-permit holder that has made a discovery and demonstrated that the wells’ productive capacity and the available geological and mining data technically and economically justify development (Article 9(1), Law No 9/1991).

Upstream licences are issued through administrative proceedings conducted by MASE through UNMIG, under the procedures of Presidential Decree No 484/1994 and ministerial rules. Applicants must satisfy technical, economic and organisational requirements and submit the relevant application, work programme and supporting documentation; applications are published in the Official Bulletin of Hydrocarbons and Geothermics (BUIG) and notified to the European Commission for publication in the Official Journal, opening a three-month window for competing applications. The exploration-permit area may not exceed 750 square kilometres, no area reduction applies below an initial 300 square kilometres, and a single entity (directly or through group companies) may hold multiple permits provided the aggregate does not exceed 10,000 square kilometres.

The application for a production concession must be supported by a detailed technical report on the discovery, the development and exploitation programmes with the related production profile, and a technical-economic report including a sensitivity analysis; UNMIG conducts the preliminary investigation, the Ministry then seeks the opinion of the CIRM (due within 60 days) and issues the concession decree within 15 days of that opinion, and the applicant must submit an environmental impact assessment request within 90 days of the Ministry’s request on pain of rejection. Natural persons must lodge an initial deposit of EUR120,000 by bank guarantee or surety bond, and titles are not granted to companies with fully paid-up share capital below EUR120,000. Ministerial rules also allow advance pre-qualification of operators under the Directorial Decree of 15 July 2015, verifying technical, economic, financial and organisational suitability so that requirements need not be re-demonstrated on each application, though pre-qualification confers no mining right in itself. Where competing applications are received, the Ministry selects, after consulting CIRM, on the statutory criteria of Article 5 of Legislative Decree No 625/1996: the interest and novelty of the objectives, the completeness and rationality of the work programme, the planned timing, and the methods of execution including safety and environmental protection.

The main upstream fiscal take consists of royalties (aliquote di prodotto) on production, together with ordinary corporate and regional taxes and administrative charges. Under Article 19 of Legislative Decree No 625/1996, each concessionaire pays annually the value of a share of production; the rates originally stood at 7% for onshore liquid and gaseous hydrocarbons, 7% for offshore gas and 4% for offshore oil, and subsequent legislation raised the onshore rate to 10% (Law No 99/2009) and the offshore rates to 10% for gas and 7% for oil. In addition, a further 3% applies, earmarked onshore as a contribution to the Hydrocarbon Fund and offshore for environmental and safety purposes.

Since 1 June 2019 royalties were increased twenty-five-fold relative to Article 18 of Legislative Decree No 625/1996, but Law No 120/2020 capped the total annual royalty at 3% of the prior year’s production value. No royalty is due on production used in field operations or re-injected, and exemptions apply to the first 25 million standard cubic metres of gas and 20,000 tonnes of oil onshore, and the first 80 million standard cubic metres and 50,000 tonnes offshore; the regime is not a production-sharing one, with no signature bonuses or profit-oil mechanisms. Of the royalty value, regions receive 55% for onshore and territorial-sea concessions and affected municipalities 15% of the onshore royalty. Annual surface fees are also payable per square kilometre, rising across the successive periods of the exploration permit (EUR185.25 in the initial six-year term, EUR370.25 and EUR740.50 in the two three-year extensions) and set at EUR1,481.25 for production concessions and EUR2,221.75 for a concession in extension.

There is no standalone hydrocarbon income tax. Upstream companies are subject to ordinary corporate income tax (IRES) at 24% under Presidential Decree No 917/1986 and to the regional tax on productive activities (IRAP) at a standard 3.9% under Legislative Decree No 446/1997, together with VAT, withholding taxes where relevant and sector-specific royalties or charges; there is no severance tax additional to royalties. International groups may seek advance tax agreements on transfer pricing, permanent-establishment and cross-border income matters, binding for five years subject to unchanged critical assumptions.

No Italian national oil or gas company enjoys a statutory carried interest, back-in right, exclusive operatorship, takeover right or right to second personnel in upstream licences. Indeed, Article 14(6) of Legislative Decree No 625/1996 expressly prohibits conditioning the grant or exercise of a mineral title on participation by the State or any regional, provincial or local administration, whether directly or through a designated entity. The State’s participation in Eni does not translate into special rights in upstream titles; any public-law prerogatives derive from the State’s role as regulator and mineral owner, not from a commercial entitlement.

Italy imposes no general local-content requirements obliging upstream investors to use Italian goods, services, employees or training as a condition of holding titles. Operators must nonetheless comply with Italian and EU public-procurement rules where applicable, labour and immigration law, health and safety and environmental obligations, and any specific commitments contained in the title or environmental authorisation.

To move from discovery to production, the exploration-permit holder must obtain a production concession, demonstrating the commercial viability of the discovery, submitting a detailed field development programme and satisfying the applicable technical, financial and organisational requirements and environmental and safety approvals. For drilling activities, applicants must show financial guarantees sufficient to cover the worst-case accident scenario identified in the risk analysis: the minimum amounts range from EUR50 million (gas and condensates, onshore) to EUR150 million and EUR200 million offshore (“shallow”/jack-up and “deep”/floater respectively), and for oil from EUR100 million up to EUR500 million depending on productive capacity and high-pressure/high-temperature conditions, provided through insurance, bank or parent-company guarantees accepted by MASE.

The development programme is examined within the concession procedure and must describe facilities, wells, infrastructure, production profile, investments and, where relevant, decommissioning measures, and the decree may impose binding technical, environmental and operational conditions. Depending on the project, an EIA, landscape or cultural-heritage approvals, drilling and mining-safety authorisations and maritime permits may also be required, and for onshore projects the concession is granted in agreement (intesa) with the relevant Region; adverse decisions may be challenged before the Regional Administrative Court (TAR) and, on appeal, the Council of State.

Upstream titles specify the area, duration, work and technical obligations, reporting duties, safety and environmental obligations, royalties, relinquishment and extension conditions, and suspension and termination grounds. Exploration permits last six years and may be extended for two successive three-year periods where the approved work programme has been fully performed (save for documented force majeure); the first extension programme must include an exploratory well, the permit area is reduced by 25% at the end of the third year, and a further one-year extension is available where drilling or testing is ongoing at expiry. Production concessions last twenty years and may not exceed 150 square kilometres, and after fifteen years a ten-year extension is available where the programmes have been performed and obligations met, with further five-year extensions to complete exploitation.

Any change to a title requires authorisation, and a title ceases upon expiry, waiver or forfeiture – forfeiture arising where the holder fails to perform the work programme or statutory or decree obligations, or to pay fees, royalties or other sums; upon termination the holder must carry out mine closure, site restoration and removal of installations, and exhausted deposits of continuing economic viability may be re-assigned as exploitation or storage concessions. Co-holders must appoint a sole representative and are jointly and severally liable towards public authorities and third parties. There are no domestic-supply obligations embedded in the title; export is not a special concession right, and hydrocarbons may be marketed subject to general market, customs, sanctions, tax and energy-security rules.

Transfers of interest in upstream titles and businesses are typically effected through share or business transfers, joint ventures, mergers or demergers. Such transactions require MASE approval and the transferee must satisfy the same technical, financial and organisational requirements as a title holder, while transfers of co-owners’ quotas are authorised by the Ministry after consulting the other co-owners. The application is submitted to MASE and UNMIG, which opines within ninety days (subject to suspension for further enquiries), and the transfer takes effect upon publication of the ministerial decree in the BUIG, recorded in the Ministry’s public register.

The parties should review the transferability of all regulatory approvals and contractual arrangements, including environmental authorisations, bonds or guarantees, land rights, maritime concessions and operator appointments, since certain permits may remain personal to the original holder or require approval of the change of operator, and the creation of mortgages over oilfields and gas fields is subject to prior MASE approval. The transferor may retain liabilities for pre-transfer obligations, environmental damage and decommissioning, and transactions involving strategic energy assets may require notification under the “Golden Power” regime or merger-control clearance.

Italy is not an OPEC member and is not subject to OPEC quotas. Production rates may nonetheless be constrained by reservoir-management requirements, approved development plans, safety and environmental limits, technical prescriptions, infrastructure capacity and specific conditions in the production concession. There is no general state-level proration regime comparable to some federal systems.

Private investment is permitted throughout the midstream and downstream sectors – including gas pipelines, storage, LNG facilities, processing, refining, wholesale supply and retail marketing – subject to the applicable authorisations and regulation, and there is no general government or private monopoly. Legislative Decree No 164/2000, implementing Directive 98/30/EC, liberalised the import, export, transport, dispatching, distribution and sale of natural gas, though natural-monopoly infrastructure (transmission, distribution and storage) remains subject to regulated third-party access, tariff regulation and unbundling. Downstream investment in refineries, petrochemicals and retail fuel distribution is conducted through ordinary corporate structures subject to environmental, safety, excise, planning and competition rules; retail fuel distribution moved in the late 1990s from a concession to an authorisation regime, now governed primarily by Legislative Decree No 32/1998 and regional implementing legislation.

There is no downstream national monopoly comparable to a state-owned exclusive refiner or marketer. Gas transmission, distribution and storage are highly regulated infrastructure activities but are not operated as a single legal monopoly of a national company. Access terms, tariff methodologies and network codes are set by ARERA and by EU internal-market legislation, and operators must provide third-party access on regulated, transparent and non-discriminatory conditions; under Legislative Decree No 164/2000, infrastructure operators must grant such access (Article 24) while ARERA determines the tariffs for transport and dispatching, storage, LNG regasification and distribution (Article 23). Services are offered through regulated access arrangements, network codes and tariffs and may include firm and interruptible capacity, balancing, storage and entry-exit products. Adverse decisions on tariffs or access are challengeable before the administrative courts, and complaints may also be raised with ARERA or the AGCM.

The import, export, transport, dispatching, distribution and sale of natural gas are, in principle, free activities, but gas transmission pipelines, storage facilities and LNG terminals require administrative authorisations, environmental assessment (EIA/screening) and, where relevant, public-utility declarations and land-rights procedures. There is no single midstream/downstream licence equivalent to an upstream production concession: authorisations depend on the specific activity and are governed mainly by Legislative Decree No 164/2000, which applies to natural gas, LNG, biogas and biomass-derived gas injectable into the system, and applicants must satisfy the technical, financial and organisational requirements set by the relevant sectoral regulation.

The exploitation and storage of natural gas must be authorised by the Ministry of Productive Activities, in agreement with MASE and the relevant Region, on proof of capacity and of a storage programme in the public interest, by a procedure akin to that for hydrocarbon exploitation, and the storage concession lasts twenty years. Gas storage is governed principally by Legislative Decrees No 164/2000, No 130/2010 and No 239/2004 and annual ARERA regulations, covering licensing, priority access, strategic and security stocks, market-based capacity allocation, regulated tariffs, system-balancing and emergency-supply obligations and MASE/ARERA supervision, and is operated by licensed companies, principally Stogit S.p.A. of the Snam group.

Transport, dispatching and distribution are public-service activities awarded by competitive tender for periods not exceeding twelve years; natural gas distribution operates under a concession for a defined minimum territorial area (Ambito Territoriale Minimo – ATEM), and any incoming concessionaire must assume the outgoing operator’s guarantee and financing obligations and pay it a reimbursement value (valore di rimborso). Snam Rete Gas S.p.A. is the national transport and dispatching operator and is subject to the State’s significant indirect influence, its largest shareholder being CDP Reti S.p.A. with approximately 31%; the sale of gas, LNG and biogas is reserved to operators enrolled in a public register kept by MASE, transport and dispatching are subject to unbundling, and refineries, petrochemical plants and fuel service stations require environmental, integrated (AIA), fire-safety, Seveso and planning permits as applicable.

The commercial framework differs markedly between regulated gas infrastructure and the private oil and petrochemical downstream. Gas transportation, storage, distribution and LNG services are governed by regulated access arrangements, network codes and tariffs approved by ARERA, and may include firm and interruptible capacity, balancing, storage (injection, withdrawal, strategic) and entry-exit products, with pricing set through ARERA tariff methodologies rather than freely negotiated (Articles 23 and 24 of Legislative Decree No 164/2000).

Oil pipelines, terminals, refining and wholesale and retail marketing are instead governed by private commercial contracts subject to competition, excise, environmental, health-and-safety and consumer rules, and typically take the form of throughput, storage, tolling or processing, supply, offtake, retail-supply and franchise arrangements. In the retail fuels sector, Legislative Decree No 32/1998 still provides the core framework, but liberalisation has broadened contractual autonomy so that its inter-professional agreements retain only a reduced prescriptive role. Volume commitments, take-or-pay clauses and firm/interruptible distinctions are relevant both in the regulated gas sector, where ARERA sets the framework, and in privately negotiated oil-sector contracts.

Midstream and downstream operators are subject to ordinary corporate income tax (IRES, 24%) and the regional tax on productive activities (IRAP, standard 3.9%), together with VAT, excise duties on energy products under the Consolidated Excise Act (Legislative Decree No 504/1995), customs duties where relevant, local property taxes and administrative or environmental fees. There is no separate income tax code for midstream or downstream hydrocarbons, and tax incentives may be available for qualifying investment, research and development, energy efficiency or transition-related projects.

No national oil or gas company enjoys general special participation rights in midstream or downstream licences. Eni and its subsidiaries may own or operate assets and take part in infrastructure or energy-transition projects, but do so as market participants subject to sector regulation, competition law and any applicable public-shareholding rules.

There are no general Italian local-content requirements mandating the use of local goods, services or labour in midstream or downstream projects. Operators must comply with labour, immigration, safety, environmental, public-procurement and anti-corruption rules, and local planning or permitting decisions may impose project-specific conditions, but these do not amount to a general local-content regime.

Regulated gas-infrastructure licences typically impose public-service and operational obligations, including third-party access, continuity of service, compliance with approved tariffs and network codes, technical maintenance, reporting, emergency preparedness and environmental and safety duties, whereas private downstream facilities are governed mainly by the terms of the relevant administrative authorisations, environmental permits, fire-safety approvals, Seveso documentation, commercial contracts and tax registrations. For gas storage, the concession is closely linked to the geological suitability of the depleted reservoir or deep formation and regulates capacity, wells, monitoring, operating conditions, emergency planning, environmental protection, access and site restoration, while performing public-interest functions such as seasonal modulation, balancing and security of supply.

Italian law imposes no general domestic-supply obligation, but operators may be subject to public-service obligations and emergency measures, including strategic stockholding: the Ministry of Economic Development, with MASE’s emergency committee, sets the annual strategic-storage volume at no less than that needed to deliver, for at least 30 consecutive days during the seasonal peak, a flow of up to 100% of the largest imports from the most-used infrastructure. Upon termination, expiry or revocation, operators remain responsible for decommissioning, site restoration and continuing environmental obligations, and import and export activities are governed by EU internal-market, customs and sanctions rules rather than by licence restrictions.

A private investor constructing energy infrastructure may obtain land rights by private agreement or, where the project is declared to be of public utility, through expropriation or compulsory easement under the Consolidated Expropriation Act (Presidential Decree No 327 of 8 June 2001). Under Article 30 of Legislative Decree No 164/2000, the works necessary for the import, transport and storage of natural gas and for LNG terminals are declared to be of public utility and urgent and indispensable, which is particularly relevant for pipelines and strategic energy works. Compensation is payable at market value, and surface rights, servitudes, access and restoration obligations are addressed through project authorisations, expropriation decrees or negotiated land agreements; regulated gas infrastructure is also subject to ARERA-approved network codes.

Hydrocarbon transportation is regulated according to the mode and infrastructure concerned. ARERA regulates access, network codes and tariffs for gas transmission, distribution, storage and LNG infrastructure, while MASE oversees energy-infrastructure authorisations and environmental assessment for pipeline projects, and sector-specific authorities regulate fire-prevention, maritime, port, customs and excise aspects of oil and petroleum-product transport.

Access to the gas market is subject to regulated, transparent and non-discriminatory conditions, ARERA tariffs and network-code compliance, whereas oil and petroleum-product transport is subject to safety, environmental, fire-prevention, customs, excise and transport-mode rules and is treated as an activity of public interest. Italy does not distinguish “interstate” and “intrastate” pipelines in the US sense; the applicable regime depends instead on whether the infrastructure forms part of the national transmission network, the regional distribution network or a private industrial pipeline, and on its strategic character, with national networks subject to ARERA and EU internal-market rules and local networks to distinct tariff frameworks under ARERA oversight.

Italy applies the EU regime on regulated third-party access to natural-gas infrastructure. Access to transmission and distribution networks, LNG terminals and regulated storage is governed by Legislative Decree No 164/2000, EU internal-market legislation and the ARERA framework, and operators must provide access on transparent, objective and non-discriminatory terms, subject to available capacity, technical compatibility and network-code compliance.

Access conditions, tariffs and operational rules are established or approved by ARERA, which also enforces transparency, non-discrimination and cost-reflectivity, and access may be refused only on grounds expressly permitted by law, such as lack of capacity, technical incompatibility or public-service obligations. Users must comply with the applicable network codes, balancing rules and contractual requirements governing capacity allocation, nomination, balancing and interoperability; disputes may be brought before ARERA, and administrative decisions are subject to judicial review before the Regional Administrative Court and, on appeal, the Council of State.

Sales of natural gas and petroleum products are generally open to licensed or authorised operators, subject to energy, commercial, tax, excise, consumer-protection, competition, sanctions and environmental rules, and retail fuel sales require local and sectoral authorisations. Traders may import, export and wholesale petroleum products subject to registration with the Oil Enterprises Registry (Registro Operatori Oli minerali) held by the Customs and Monopolies Agency (ADM), with the sector operating on free commercial negotiation subject to competition law and price-reporting obligations.

The sale of natural gas to final customers requires inclusion in the register of authorised sellers kept by MASE (Article 17, Legislative Decree No 164/2000), and wholesale gas is traded on the organised markets managed by the Energy Markets Operator (GME) – including the day-ahead (MGP-GAS) and intraday (MI-GAS) markets and the balancing platform (PB-GAS) – as well as bilaterally at the Virtual Trading Point (PSV). There are no general restrictions requiring sales through State intermediaries, though sanctions, anti-money laundering, customs, excise, strategic-stockholding and emergency rules may restrict specific counterparties, products or flows.

Imports and exports of crude oil, natural gas and petroleum products are governed by EU customs, energy, sanctions, excise, safety, environmental and market rules as implemented domestically. Cross-border sales of oil and oil products follow EU free-movement rules and the Union Customs Code (Regulation (EU) No 952/2013) and are subject to customs formalities, product-quality standards, excise duties under the Consolidated Excise Act (Legislative Decree No 504/1995) and stockholding and security-of-supply reporting to MASE and the EU (Directive 2009/119/EC).

Cross-border gas infrastructure and LNG projects require energy-infrastructure authorisations, environmental assessment and compliance with EU market-access and interconnection rules. Export taxes are not a feature of the regime, but customs, excise, VAT and sanctions must be assessed transaction by transaction, and sanctions (see 4.2 Sanctions) are particularly relevant for dealings involving Russia, Iran and other restricted counterparties. LNG terminals form part of the regulated gas-infrastructure framework and may be subject to third-party access and tariff rules unless exempt; Italy is primarily an LNG importer, with no special upstream gas-reserve dedication regime for export projects.

Transfers of midstream and downstream operations and assets are typically structured through share or business transfers, joint ventures, mergers or demergers, depending on the assets and transferor, and the transfer of regulated infrastructure, licences and administrative authorisations may require prior notification to, or approval by, the competent authority, or amendment or reissuance of the relevant permits. The parties should review the transferability of all approvals and contractual arrangements, including environmental permits, integrated authorisations, Seveso documentation, fire-safety certificates, customs and excise registrations, land rights, easements and network-access, transport or storage contracts, as certain permits may remain personal to the holder or require approval of the change of operator. Where regulated gas infrastructure is concerned, the transferee must also comply with the applicable licensing requirements, the ARERA framework, network codes and unbundling obligations, and pre-completion liabilities for safety, environmental compliance, decommissioning and remediation may remain with the original operator; transactions involving strategic energy assets may require “Golden Power” notification or merger-control clearance.

Foreign investment in Italian hydrocarbons is generally permitted, subject to EU and Italian foreign-direct-investment screening. At EU level, Regulation (EU) 2019/452 establishes the screening framework to which the Italian regime is aligned; nationally, screening operates under the “Golden Power” regime of Decree-Law No 21 of 15 March 2012 (converted by Law No 56/2012), covering strategic assets in energy, transport and communications. The oil and gas sector is strategically sensitive, particularly where transactions involve energy networks, security of supply, critical infrastructure, LNG, gas storage or major upstream or midstream assets; strategic energy assets, first identified by Presidential Decree No 85/2014, are now identified by two 2020 implementing decrees covering, among others, the national gas transport network, gas and electricity import infrastructure (including LNG terminals) and the electricity transmission network.

Relevant transactions must be notified to the Presidency of the Council of Ministers, which may impose conditions, veto resolutions or oppose acquisitions of control, with powers applying to non-EU acquisitions and certain extraordinary transactions, and the Government reports annually to Parliament while the courts have upheld the framework. Foreign investors enjoy ordinary constitutional and legal protections, including protection of property and access to administrative-judicial review, and expropriation is permitted only under the law, for public interest and against compensation, in accordance with Articles 42 and 43 of the Constitution and Presidential Decree No 327/2001.

Italy ratified the Energy Charter Treaty by Law No 415/1997 but withdrew with effect from 1 January 2016; under the sunset clause, investments made up to 31 December 2015 may still resort to arbitration for twenty years, and investor–state arbitration against Italy has occurred, including ESPF Beteiligungs GmbH and others v Italian Republic (ICSID Case No ARB/16/5). Italy is a signatory to, and has ratified, both the New York Convention and the ICSID Convention, and enterprises with international activities may obtain advance tax agreements with the Revenue Agency under Article 31-ter of Presidential Decree No 600/1973, binding for five years, with a dedicated advance ruling available for significant new investments.

Italy applies EU and UN sanctions affecting investment, financing, trade and services concerning designated jurisdictions, entities and individuals. EU restrictive measures apply principally through directly effective EU Regulations adopted under Article 215 TFEU, while Italian legislation supplies the competent authorities, licensing procedures, asset-freezing machinery, reporting channels and penalties; the Ministry of Economy and Finance (MEF) describes them as measures freezing funds and economic resources held in Italy. In the oil and gas sector, sanctions may affect crude oil, petroleum products, LNG, technology, drilling equipment, financing, shipping, insurance, brokering and services, and are enforced principally through Legislative Decree No 221/2017 (trade, export-control and embargo matters, including dual-use goods) and Legislative Decree No 109/2007 (asset freezing and financial sanctions).

With reference to Russia, the MEF’s “Sanzioni Finanziarie” system manages authorisation requests under Regulation (EU) No 833/2014, and credit institutions must report Russian and Belarusian deposits to the Financial Intelligence Unit (UIF); operators must screen counterparties, beneficial owners, vessels, products, financing and destinations, and comply with freezing measures over designated persons. The competent authorities include the MEF – Department of the Treasury, the Financial Security Committee (CSF) and the UIF at the Bank of Italy. Italy maintains no wholly separate national sanctions system for ordinary commercial transactions but enforces EU measures and may impose criminal or administrative penalties, the framework having been most recently amended by Decree-Law No 95 of 30 June 2025.

The principal environmental statute is Legislative Decree No 152 of 3 April 2006 (the Environmental Code), governing EIA, SEA, integrated environmental authorisation, waste, water, air emissions, remediation and environmental liability, with offshore activity subject to the exclusions of its Article 6(17). MASE is the main national environmental authority for state-level EIA and strategic energy matters, while Regions and local authorities are competent for regional and local permits and land-use approvals, and UNMIG supervises technical, safety and certain environmental aspects of upstream and storage operations. Regions, Provinces and municipalities participate in proceedings where they are competent to issue opinions or authorisations, typically within the Services’ Conference (Conferenza di Servizi), and the regional environmental protection agencies (ARPA) support the authorities, conduct inspections and controls and may propose sanctions. Adverse decisions may be challenged before the Regional Administrative Court and, on appeal, the Council of State.

A major hydrocarbon project generally requires environmental screening or a full Environmental Impact Assessment (EIA), depending on its nature, location and scale, with the operator submitting project documentation, baseline information, impact assessments, a mitigation plan and monitoring proposals. EIA is handled principally by MASE for projects of State competence and by regional authorities otherwise, with timing dependent on complexity, public consultation and any requests for further information, and additional obligations may include integrated environmental authorisation (AIA), waste-management plans, water-discharge and air-emission permits, landscape approvals, Natura 2000 appropriate assessment, Seveso compliance, fire-safety approvals, maritime permits and local planning approvals.

The EIA process incorporates public consultation and the participation of affected municipalities and regions; although Italy has no separate formal “social impact assessment”, community engagement is embedded, and regional or local opposition can materially affect timing, litigation risk and permitting. For projects in sensitive, offshore or PiTESAI-constrained areas, compatibility with national planning and environmental limits is critical: the Plan operates as a spatial pre-condition applied before the project-level assessment, so new prospection, exploration and production may proceed only within potentially suitable areas and, for new activity, only for gas. Following the partial annulment of PiTESAI by the TAR Lazio, later legislation has preserved several of its restrictions, so new projects must be assessed against both the original criteria and subsequent eligibility provisions; PiTESAI was itself adopted after a Strategic Environmental Assessment (SEA Decree No 399 of 29 September 2021), which frames the subsequent EIAs and, where relevant, appropriate assessments (VINCA).

Offshore development is subject to hydrocarbon-title requirements, environmental assessment, offshore-safety rules, major-hazard risk assessment and emergency-response obligations. The National Offshore Safety Committee has functions concerning the safety of offshore operations, through which Italy reports on its offshore-safety arrangements, and operators must submit safety and risk documentation, comply with well-control, emergency, worker-safety and environmental-protection requirements and maintain financial capacity or security where required.

Offshore activity is further limited by marine exclusion zones and PiTESAI eligibility criteria: the Plan covers only 5% of the marine area under Italian jurisdiction, within which new prospecting and exploration are admissible only in potentially suitable areas and exclusively for gas. Existing marine concessions may continue even where installations fall within potentially unsuitable areas, unless unproductive for more than five years before the Plan’s adoption for reasons attributable to the concessionaire, and new titles are prohibited in protected marine and coastal areas and within twelve miles of the coastline; the Plan also envisages measures to accelerate decommissioning of end-of-life offshore platforms.

Decommissioning obligations require operators to plug and abandon wells, remove or make safe facilities, restore sites and comply with environmental and safety prescriptions, with plans and closure activities approved and supervised by the competent ministry and technical offices; offshore decommissioning must also address maritime safety and any conditions in the concession and EIA. Upon termination of a title for any reason, the holder must decommission disused installations, including wells and pipelines, restore the areas and remove associated equipment within two years, on the basis of a decommissioning programme prepared by the licensee in compliance with the Environmental Code and the title’s prescriptions. Liability may remain with the title holder and, in certain circumstances, prior owners or operators may retain contractual or statutory liabilities for environmental damage, contamination or decommissioning costs, and security or financial assurance may be required under the title, the environmental permit or the offshore-safety regime.

Italy is subject to the EU climate framework, including the EU Emissions Trading System (ETS), the Effort Sharing Regulation, renewable-energy targets, energy-efficiency obligations and methane and industrial-emissions rules, as implemented or directly applicable. At national level, the National Integrated Energy and Climate Plan (PNIEC) provides the energy-transition planning framework and decarbonisation measures, increasingly affecting oil and gas investment. Oil-and-gas-specific constraints include tighter scrutiny of new upstream projects, the PiTESAI framework, EU methane-emission reduction measures, ETS exposure for refineries and certain installations, and transition incentives for hydrogen, biomethane, carbon capture and renewables.

Local governments may influence oil and gas development through land-use planning, building permits, environmental procedures, road access, local health-and-safety matters and participation in State or regional proceedings, but they cannot generally override state competence over the mineral title itself. Regional and local opposition can nonetheless materially affect timing, litigation risk and permitting, particularly for onshore wells, pipelines, storage and downstream facilities.

Italy’s energy transition is driven by EU climate law, the National Integrated Energy and Climate Plan (PNIEC), renewable-energy support schemes, energy-efficiency measures, hydrogen and biomethane programmes, PNRR-funded investment and the PiTESAI framework for hydrocarbon activity. PiTESAI is directly relevant to upstream hydrocarbons because it identifies the areas compatible with continued exploration and production in light of transition objectives, and recent measures have introduced limited derogations from the original framework to strengthen domestic gas production and security of supply, notably for certain offshore gas projects and selected existing gas concessions, while preserving the general approach based on suitable and unsuitable areas. Together, these laws and programmes are reducing the attractiveness of new upstream exploration while increasing investment in gas security of supply, LNG, storage, biomethane, hydrogen, carbon capture, renewable power and electrification.

Oil and gas assets are increasingly relevant to energy-transition projects: gas pipelines and storage assets may be adapted or assessed for hydrogen blending, transport or storage, and depleted reservoirs or subsurface formations are used for carbon capture and storage (CCS). Traditional energy groups, including Eni, are strategically shifting towards transition assets, as illustrated by vehicles such as South Italy Green Hydrogen S.r.l., and the sector is regulated mainly through the PNIEC decarbonisation framework and PiTESAI. Operators are under pressure to reduce methane and greenhouse-gas emissions, improve energy efficiency, electrify operations and participate in carbon markets, and refineries and energy-intensive installations in particular fall within the EU ETS and are investing in renewable fuels, biofuels, sustainable aviation fuel, hydrogen and circular-economy projects, while EU methane regulation and ETS reform increase regulatory pressure and, through the cost of carbon allowances, production costs. At the same time, investment is supported by PNRR funding for hydrogen, biomethane and efficiency projects, by renewable-energy and efficiency support schemes, and by tax incentives for qualifying research, innovation, efficiency and transition-related projects.

Energy transition is reshaping traditional oil and gas development by shifting investment away from new domestic exploration and towards security of supply, LNG, storage, grid flexibility, hydrogen, biomethane, CCS and low-carbon fuels. Over the next five to ten years, the most material opportunities are likely to lie in the development and revamping of existing upstream sites, gas-infrastructure flexibility, LNG import capacity, hydrogen-ready assets, biomethane and the decarbonisation of refining and heavy industry, rather than in large-scale new domestic oil exploration.

Italy has no developed special regime for unconventional hydrocarbons such as shale gas, heavy oil or coal-bed methane comparable to major unconventional-producing jurisdictions. Hydraulic fracturing has not developed as a significant commercial activity and would face substantial environmental-assessment, seismic, water, waste, public-consultation and political constraints, and any unconventional project would still require the ordinary hydrocarbon title and environmental approvals and compatibility with PiTESAI and the statutory exclusion zones.

LNG projects are subject to infrastructure authorisation, environmental assessment, maritime and port approvals, safety and emergency requirements and gas-market access regulation; LNG terminals form part of the regulated gas-infrastructure framework and may be subject to third-party access and tariff rules unless exempt, with ARERA regulating access and tariffs.

The construction and operation of an LNG regasification terminal typically require, as a minimum:

a single authorisation for large energy infrastructure (autorizzazione unica), generally granted through a state-level procedure with a conference of services;

• a maritime state-property concession (concessione demaniale marittima) for coastal or offshore facilities;
• environmental approvals, including state-level EIA screening and/or full EIA and, where thresholds are met, integrated environmental authorisation (AIA);
• emissions, water-discharge and noise permits from the competent authorities;
• Seveso classification and related obligations under Legislative Decree No 105/2015;
• building permits and urban-planning conformity;
• for offshore components, authorisations for subsea pipelines and coastal landfalls and port and navigation-safety clearances (Capitaneria di Porto);
• fire-prevention approvals from the National Fire Brigade; and
• gas-sector registration with ARERA and MASE with compliance with TSO and market rules.

There is no special upstream gas-reserve dedication regime for LNG export projects; Italy is primarily an LNG importer and LNG infrastructure is strategically relevant for security of supply.

A distinctive feature of the Italian hydrocarbon sector is the coexistence of mature domestic upstream production (the Ministry reports more than 886 producing wells, 525 onshore and 361 offshore), strong environmental and spatial restrictions, a heavy strategic reliance on gas infrastructure and a major energy-transition agenda. The concession system dates from Royal Decree No 1443/1927 and has been continuously adapted through Law No 6/1957, Law No 613/1967, Law No 9/1991, Legislative Decree No 625/1996 and ministerial decrees, producing a layered regulatory framework, while new upstream activity is now constrained by marine prohibitions, PiTESAI, environmental-litigation risk and decarbonisation policy. Investors should therefore regard Italy as a regulated, infrastructure-heavy and transition-oriented market, with opportunities in innovative projects, the development and revamping of existing upstream production and the improvement of energy infrastructure.

The most material recent trend is the continued implementation of energy-security and energy-transition measures following the European gas crisis, with a stronger focus on LNG capacity, gas storage, supply diversification, renewable gases and decarbonisation. In response to high prices and security-of-supply concerns, Italy has adopted a range of temporary and structural measures, including retail price protections (temporary caps on system charges, VAT reductions on gas and support for vulnerable customers), extraordinary windfall levies on energy companies, a boost to domestic output through the reopening of limited production areas and simplified permitting for maintenance and marginal fields, supply diversification (the Piombino and Ravenna FSRUs and long-term contracts with Algeria and Azerbaijan, together with expanded storage obligations) and demand-side subsidies for efficiency, heat pumps and renewables. The hydrocarbon-title framework remains based on Legislative Decree No 625/1996 and Law No 9/1991, but new projects must be assessed against PiTESAI and current environmental constraints, and from 1 June 2019 annual fees for production and storage concessions were significantly increased by Decree-Law No 135/2018 (converted by Law No 12/2019). Investors should continue to monitor EU methane regulation, ETS reform, renewable fuels, hydrogen and CCS, and Italy’s foreign-investment screening practice for strategic energy assets.