Italians vote on oil and gas as scandal ups pressure on Renzi

Italians voted Sunday in a referendum on oil and gas drilling concessions after a debate fuelled by anger over a government corruption scandal and freighted with risk for Prime Minister Matteo Renzi.

In a campaign pitting environmentalists against the government and big business, Italians are deciding whether they want to repeal a new law about drilling near the country's coast.

The legislation, passed only in January, says existing concessions within 12 miles (19 kilometres) of the coast should remain valid until the fields are depleted -- a measure that infuriates campaigners for renewable energy.

The referendum is a key challenge for Renzi's centre-left Democratic Party (PD) after two years in office in which he has pushed through a string of pro-business and political reforms.

Renzi has called on Italians not to vote in the hope that the measure will fail to cross the turnout threshold.

But the appeal has sparked a backlash from opposition parties and deepened a rift within Renzi's camp.

Under Italy's referendum law, the ballot is only valid if more than 50 percent of the country's nearly 47 million registered electors cast their vote.

As of 7:00 pm (1700 GMT), turnout was 23.48 percent, according to interior ministry figures. Polling stations close at 11:00 pm (2100 GMT).

Environmentalists claim platforms near the shore present risks to health and protected habitats.

They argue that reversing the law will send a clear signal the country wants to go green and stop what they call "dirty deals" which benefit oil companies.

"It (Other OTC: ITGL - news) 's a hoax referendum, they say it's about renewable energy, but actually it would mean shutting down working rigs with the loss of 11,000 jobs," Renzi said this week.

Several leading political figures slammed him as a liar and criminal. A recent scandal in Italy that saw a top minister resign over alleged favours to French oil giant Total (LSE: 524773.L - news) has spread concerns the law was changed "as a present to oil companies" such as Italian giant Eni (LSE: 0N9S.L - news) .

- Polling booths or beaches -

The law on drilling concessions affects nine regions, nearly all of which are led by the PD. As a result, the referendum wrangle has fuelled a bitter internal battle and bolstered attacks on Renzi's leadership.

"It's unacceptable for the PM to be the head of the pro-abstention party," said Roberto Speranza, a leading PD rebel.

A "Yes" victory would be a heavy blow to Renzi ahead of a constitutional reforms referendum in October, on which the 41-year-old has bet his political career.

As for the energy companies, it would mean that the 92 platforms within the 12-mile limit would have to start closing from 2018, with the last in 2034.

Most observers say the result will have little effect on government income either way.

Concessions within the 12-mile band brought in a relatively modest 38 million euros ($43 million) in royalties in 2015, according to official data.

If the referendum fails, say opponents, the door will be flung open to underhand dealings.

"The biggest favour to oil and gas -- extending extraction indefinitely -- allows them to avoid shelling out money to dismantle the platforms once the concessions have expired," said Michele Emiliano, president of the Puglia region.

The "Yes" camp insists far fewer than 11,000 jobs are at risk, as many of the 92 platforms in question are unmanned.

They are also furious that Renzi refused to hold the referendum on the same day as local elections later this year, a decision which will cost the taxpayer 300 million euros ($338 million), according to the regions and environmentalists.

Genoa Mayor Marco Doria said it was "outrageous" they had been kept separate in the hope Italians would head to the beach instead of voting.