Italy Oil and Gas Market - Growth, Trends, COVID-19 Impact, and Forecast (2021 - 2026)

The Italy Oil and Gas Market is Segmented by Sector (Upstream, Midstream, and Downstream).

Market Snapshot

Italy Oil and Gas Market Overview
Study Period: 2018- 2026
Base Year: 2019
CAGR: >2 %

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Market Overview

The Italian market for oil and gas is expected to register a CAGR of approximately more than 2.0% during the forecast period. The COVID-19 pandemic severely affected the country, with many cases and deaths taking place in different regions across the country in 2020. With an economic slowdown, consumption is expected to reduce severely, which is expected to reduce the growth in the market. The primary driver for the market is expected to be the demand for natural gas in its power sector, which contributed to more than 40% of gross electricity production during 2019. However, the Italian government emphasizes shifting toward renewable energy resources to reduce its carbon footprint, which is expected to hinder the market growth during the forecast period.

  • Natural gas is a significant segment in Italy's oil and gas market. Being a net importer of natural gas, it imports a significant volume of natural gas through pipelines from Russia, Algeria, and Libya.
  • Italy had a proven gas reserve of around 1.6 trillion cubic feet of natural gas and 0.4 thousand million ton of crude oil as of 2019. In order to boost domestic production, the Italian government simplified the administrative procedures for the installation of oil production units. The Single Procedure and Conference of Administrations was introduced in the licensing process to simplify and speed up such operations. Moreover, the government introduced incentives for developing secondary fields and geophysical studies. Thus, with changes in the licensing process, the proven reserves are expected to create an opportunity for the market in the near future.
  • Developments in the offshore and onshore oil and gas fields, such as Teodorico Gas Field, Val d’Agri, and Tempa Rossa, are expected to drive the Italian oil and gas market. Teodorico Gas Field is expected to produce gas by 2022, while Val d’Agri and Tempa Rossa gas fields are expected to further support the oil-extracting industry during the coming years.

Scope of the Report

The Italy oil and gas market report includes:

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Key Market Trends

The Midstream Segment to Witness Growth

  • Italy's midstream segment includes the oil and gas pipeline and storage facilities. As of 2019, the country has more than 391 kilometers of oil pipeline and 879 kilometers of natural gas pipeline. In the same year, there are nearly 10 natural gas storage facilities, with a total capacity of 16 bcm of natural gas.
  • Italy primarily depends on natural gas to meet its energy demand. The natural gas production of gas in Italy decreased by 10.9% to 0.45 billion cubic feet per day in 2019 from 0.50 billion cubic feet per day in 2018. The consumption of natural gas increased in the country by 2.3%, from 6.85 billion cubic feet per day in 2019, compared to 6.70 billion cubic feet per day in 2018. The increasing consumption increases the investments in the midstream industry, leading to new investments in the pipeline sector.
  • In 2020, the Trans Adriatic Pipeline began delivering gas from Azerbaijan to Italy on December 30, with 3 million cubic meter of technical gas supplied into the line. Shareholders of the TAP pipeline are some of Europe's biggest energy companies: BP (20%), Snam (20%), Fluxys (19%), Enagas (16%) and Axpo (5%). Azerbaijan's state-owned Socar, one of the developers of the Shah Deniz 2 gas field, holds the final 20%.
  • There are seven long-term buyers of TAP gas destined for Italy with a total of 8 Bcm/year: Shell, Engie, Uniper, Naturgy, Hera Trading, Enel, and Axpo. DEPA contracted by 1 bcm/year of gas in Greece and Bulgargaz and 1 bcm/year in Bulgaria. The pipeline is expected to be fully commissioned by the end of 2021.
  • Italy is expected to expand its midstream sector, with the installation of around 1677 kilometers of natural gas pipelines. Moreover, Italy is expected to add around 249 billion cubic feet (bcf) of underground gas storage capacity between 2019 and 2023 from 14 planned and announced underground gas storage sites. Thus, the completion of these projects is expected to expand the downstream sector during the forecast period.
  • Thus, the midstream segment is expected to witness growth in the coming years due to new infrastructure projects and the demand for natural gas.
Italy Oil and Gas Market Growth

Increasing Developments in Onshore and Offshore Fields to Drive the Market

  • The country is engulfed with the Mediterranean sea on three sides, with recently discovered some oil and gas fields, especially in the eastern region of the sea.
  • In 2019, Italy had nearly 1,594 producing wells (881 onshore and 713 offshore). Among these, 1,291 wells produce gas, while the remaining 303 are mineralized by oil. A large percentage of these wells are concentrated in specific oilfields.
  • The two important oilfields in the country are Val d’Agri and Tempa Rossa, responsible for approximately 6% of Italy’s oil and gas demand in 2019. They are expected to support oil production during the forecast period. For instance, the operators of the oilfield Tempa Rossa produced nearly 50 thousand barrels of oil per day, which is expected to boost the oil production in the country.
  • Teodorico Gas Field is a recently approved gas field in Italy that was awarded for exploration in July 2012 but was under various approvals for a long time. At the beginning of 2019, it got the preliminary approval for environmental impact assessment. It is expected to get the final approval at the end of 2019. The field is expected to have nearly 36 billion cubic feet of natural gas production in the second quarter of 2021.
  • Although the country mostly depends on imported natural gas to meet the demand, it can attract players to explore and develop new fields with its changes in exploration policies. Developments of new fields are expected to reduce the country's import dependency and become self-reliant in the near future.
Italy Oil and Gas Market Share

Competitive Landscape

The Italian oil and gas market is consolidated. Some of the major players in the market include Eni SpA, Edison SpA, Engie Italia SpA, SGS Italia SpA, BP PLC, Total SA, and Zenith Energy Ltd.

Recent Developments

  • IIn March 2020, Eni announced its plans to reduce CAPEX by EUR 2 billion in 2020, equivalent to 25% of what it originally planned to spend, while OPEX will be EUR 400 million less than intended. Eni is a major oil and gas Italian company, and its lowering of expenditure is expected to impede the growth of the market.
  • In 2020, Egypt spearheaded the establishment of the East Mediterranean Gas Forum. The group, which also includes Cyprus, Greece, Israel, Italy, Jordan, and the Palestinians, is meant to boost cooperation among the region’s gas producers and transit countries. This is expected to open a pipeline for natural gas transmission around the Meditteranean sea.
  • The Italian refinery authorities in the country reported that no supply issues were created due to the coronavirus pandemic in 2020.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Study

    2. 1.2 Market Definition

    3. 1.3 Study Assumptions

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET OVERVIEW

    1. 4.1 Introduction

    2. 4.2 Italy Oil and Gas CAPEX Trends, till 2020

    3. 4.3 Italy Oil and Gas Production Forecast in thousand barrels per day and billion cubic feet respectively, till 2026

    4. 4.4 Italy Oil and Gas Consumption Forecast in thousand barrels per day and billion cubic feet respectively, till 2026

    5. 4.5 Recent Trends and Developments

    6. 4.6 Government Policies and Regulations

    7. 4.7 Market Dynamics

      1. 4.7.1 Drivers

      2. 4.7.2 Restraints

    8. 4.8 Supply Chain Analysis

    9. 4.9 PESTLE Analysis

  5. 5. MARKET SEGMENTATION - BY SECTOR

    1. 5.1 Upstream

    2. 5.2 Midstream

    3. 5.3 Downstream

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 6.2 Strategies Adopted by Leading Players

    3. 6.3 Company Profiles

      1. 6.3.1 Eni SpA

      2. 6.3.2 Edison SpA

      3. 6.3.3 Engie Italia SpA

      4. 6.3.4 SGS Italia SpA

      5. 6.3.5 BP PLC

      6. 6.3.6 Total SA

      7. 6.3.7 Zenith Energy Ltd

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Italy Oil and Gas Market market is studied from 2018 - 2026.

The Italy Oil and Gas Market is growing at a CAGR of >2% over the next 5 years.

Eni SpA, Edison SpA, Engie Italia SpA, SGS Italia S.p.A., BP plc are the major companies operating in Italy Oil and Gas Market.

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