Coro Energy suing Italian contractor over Bezzecca shut-in

Coro Energy announced on Tuesday that it has filed legal proceedings against an Italian contractor to claim damages resulting from the cessation of production at the Bezzecca field, where it restarted production last November.

The AIM-traded firm alleged that the original construction “lacked effective cathodic protection”, leading to corrosion and the shut-in of gas production for safety and environmental reasons in March 2020.

It said it was claiming damages of around €0.3m (£0.26m) for the capital and related costs of replacement equipment and necessary cathodic protection, as well as a €7m for consequential losses during the shut-in period.

“Having both filed a claim against the relevant contractor and completed an independent investigation to determine the reasons for the incident some time ago, the company has now separately received a copy of the opinion of the expert appointed by the court assessing the merits of the company's claim,” the board explained in its statement.

“The company views the expert's opinion as strongly favourable to Coro's claim.

“In accordance with the terms of the option agreement between the Company and Zodiac Energy for the potential sale of the Italian portfolio, details of which were originally announced by the company on 24 August 2022, any proceeds from this legal claim on Bezzecca accrue to Coro.”

At 1334 GMT, shares in Coro Energy were up 0.38% at 0.26p.

Reporting by Josh White for Sharecast.com.