Oil exploration-a new broom sweeps clean

Source: Mr George Manigon¸ PKF Malta

As Publish on 7th April 2013 in the Sunday Independent.

Conspicuously the man in the street expects that the Hon Joe Mizzi now responsible for oil and gas exploration makes it a priority to seriously consider a proper investment strategy and plan a solid future oil exploration plan. As reported in the media this week¸ Mr Mizzi said the government was giving a boost to oil exploration and would open all the areas around Malta for interested companies. In just three weeks since his appointment he hit the road running since it was reported that he already had meetings with a company interested in drilling two exploratory oil wells. Government intends to open all seven areas on the island’s continental shelf for exploration licensing. We all know that the investment needed by a company in drilling offshore wells in deep waters reach upwards of €60m each apart from the cost of 3D seismic surveys. So 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 has teamed up with Master Investor 2013¸ which is UK’s leading investment show taking place in central London on the 27 th April 2013 to attract investors in this sector. The show is now in its 11th year and attracts over 2¸500 attendees where investors meet with top executives in various sectors including oil and gas exploration and ancillary industries. It also gives investors unique insights on country specific opportunities. PKF will be inviting companies¸ representatives of the Infrastructure Ministry¸ MRA and other Enemalta representatives in the oil procurement division to participate and actively contribute to the development of the industry. With hindsight we remind readers 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 companies with a view to encouraging them to prospect for oil and gas . Priorities change under different political administrations so in the past Labour administrations spearheaded Malta’s oil exploration drive but unfortunately Malta had to overcome great difficulties to develop its economy particularly to build hotels and catering establishments to support tourism¸ and diversify into manufacturing and service industries. Observers lament that oil exploration was not viewed as a viable industry in Malta and in the past decade it has even gone in reverse drive. With hindsight few ever contemplated that we need to increase our GNP partly from oil exports in order to start repaying the accumulated national debt and furthermore assure ourselves of autonomy in energy resources resulting in possible cheaper electricity and water bills. All exploration attempts since 1953 faile

d some with 12 dry wells and a few others with limited oil and gas . Exploration activity was triggered by the discovery of oil in Triassic dolomites at Ragusa in nearby SE Sicily. In 1953¸ a local company The national Oil Development Company (Malta) Ltd.¸ financed by Maltese businessmen applied for a permit to start methodical prospecting but notable 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 surveying. In 1955 petroleum mining concessions were granted to BP Exploration Co. Ltd in respect of the whole of the land area of Malta. Between 1955 and 1959¸ the British Petrol