Source: Mr G M Mangion¸ PKF Malta
As Published on Wednesday 4th September on Malta Today
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Libyan Prime Minister Ali Zeidan arrived in Malta last Monday for talks with Prime Minister Joseph Muscat and has reached a conclusion on talks on joint oil exploration which started in June when Dr Muscat said there was willingness for cooperation on such matters between the two countries. Official media revealed that a strong Libyan delegation arrived for talks last Sunday night composed of three ministers – Abdulgadir Mohamed (Transport)¸ Abdulbari A. Arousi (Oil and Gas) and Mustafa M. Abofamas (Economy) . It is encouraging to note that progress was reached on many fronts and an important breakthrough was reached on the long outstanding problem of oil exploration in waters which both countries claim as their own.
The two countries have also signed an agreement to carry out joint oil explorations in disputed areas in the Mediterranean following years of disputed offshore acreage which has stymied international investors from starting drilling in such areas. It is not a moment too soon for Malta to seriously search for hydrocarbons in its southern waters and make up for lost time during the past unsuccessful attempts which rendered the topic as a taboo. In the words of Dr Muscat “We know that this joint exploration will take time¸ but it has created a step forward in the impasse that has been with us for the past 10 years¸ and provides a new model for work without Italian partners in the Northern part of the disputed territory¸” Government intends to open all seven areas on the island’s continental shelf for exploration licensing. Without joint agreement with Italy¸ Tunisia and Libya It takes a lot of encouragement for companies to take the plunge and risk their capital in Malta acreage. In this context it is encouraging to read that PKF this year had teamed up with Master Investor 2013¸ which is UK’s leading investment show taking place in central London to attract investors in this sector. The show is now in its 11th year and attracted over 2¸500 attendees where investors meet with top executives in various sectors including oil and gas exploration and ancillary industries. It also gave investors unique insights on country specific opportunities. The speaker from PKF explained at the London event that it was more than fifty years ago that the government of the day embarked on a drive to market Malta’s offshore oil acreage among investors with a view to encouraging them to prospect for oil and gas . Observers lament that oil exploration since the late eighties was not viewed as a viable industry and more so during the PN administration of the past decade it has even gone in reverse drive. Not enough drilling was done and the wells that were ventured since 1953 failed resulting with 12 dry wells and a few others with limited oil and gas shows.
Exploration frenzy was triggered by the discovery of oil in Triassic dolomites at Ragusa in nearby SE Sicily when in 1953¸ a local company “The national Oil Development Company (Malta) Ltd.”¸ financed by Maltese businessmen applied for a permit to start prospecting but this attempt failed due to lack of capital. This was followed in 1954 by an agreement with the D’Arcy Oil Exploration Company to co-ordinate deep boring and conduct detailed geological and geophysical su