Fracking – a potential gold mine?

Source: Mr George Mangion¸ PKF Malta

As published on Sunday 26th August 2013 on the Malta Independent

The subject of oil and gas has been associated with airy-fairy political spin prior to each election and regrettably has been labelled a taboo subject. However¸ with a change of government Malta¸ is lucky to have the services of Joe Mizzi¸ the energetic minister responsible for this sector. Logically¸ the oil and gas conference planned to take place in Rome in October where both the Italian and Maltese energy authorities will speak¸ can be an ideal platform to start the ball rolling on how to attract more foreign direct investment in the Ragusa basin with its highly recommended acreage.

In this context it is encouraging to read that in March¸ PKF had teamed up with Master Investor 2013¸ the UK’s leading investment show held in central London to attract investors in this sector. The show¸ which is now in its 11th year¸ attracted over 2¸500 attendees where investors met with top executives in various sectors including oil and gas exploration and ancillary industries. It also gave investors unique insights on a country’s specific opportunities.

The speaker from PKF explained at the London event that it was more than 50 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. Another interesting conference to be organized in London next October is that by specialist organizer Oil Barrel¸ which will also feature PKF as a speaker on the Malta acreage.

So with this introduction¸ I hope that readers will bear with me and follow arguments in respect of the unconventional type of exploration of oil and gas exploration particularly the controversial subject of “fracking” which is currently in the news. This is obviously not a practical operation for us due to size limitation (although we were close to striking gas deposits in the Madonna Taz Zejt well drilled in Gozo). In UK¸ the government had given the green light to operators to try their luck in extracting shale oil. This follows the commercially successful use of fracking in the US¸ where it has revolutionised the energy industry¸ such that it is expected that within a decade gas prices will drop and US can compete with Middle East and Gulf producers¸ challenging their existing monopoly on production of gas. It is estimated to offer gas security to the US and Canada for about 100 years¸ and has presented an opportunity to generate electricity at half the CO2 emissions of coal. But Prof. Richard Davies¸ from Durham Energy Institute in Durham University¸ said people are concerned the UK could become like the US¸ where 25¸000 wells are being drilled every year to be fracked; in the UK there are a mere 2¸152 inland wells.

The first attempt was in West Sussex where citizens have said they are determined to continue their protest against fracking by the operator Cuadrilla. It so happens that recently the protest became a national issue such that it resulted in the need to have a heavy police presence outside the Cuadrilla head office in London Road¸ Balcombe¸ where two lorries have entered the West Sussex site¸ with demonstrators marching in front¸ linking arms as the vehicles made their way down the road. Protester George Barda¸ 37¸ said h