Shell will make a payment to Cabot to cover the costs and inconveniences incurred in the withdrawal process, the company said.
The withdrawal is described as being part of Cabot’s strategy to divest its interests out of non-core assets, in order to focus resources on the rest of its business.
"The withdrawal from the Po Valley Cascina Alberto exploration permit is consistent with our strategy to divest non-core assets to enable Cabot to focus funding and management time on the exploration upside within the rest of our Italian portfolio," said Scott Aitken, Cabot chief executive.
It also follows a government decree in February which suspended work on oil and gas exploration permits and applications for new exploration permits in Italy, to allow a national review of the industry.
Cabot meanwhile noted that it continues to be prepared to progress its offshore Italy permits once the national review is completed, ‘whenever that occurs within the next 17 months’.
The company added that although no assurances can be given, the directors are optimistic for a positive outcome. It highlighted that all of its remaining exploration permits have all been subjected to rigorous environmental reviews.