Malta undecided on drilling moratorium

Malta is reluctant to commit itself to an EU-wide moratorium on oil-exploration drilling in deep waters, preferring instead to adopt a wait-and-see approach.

The European Parliament is this week expected to vote on a non-legislative resolution recommending a freeze on new deep sea drilling around the EU, pending a European Commission review into existing safety and liability rules.

The resolution will be made following a recent appeal by Energy Commissioner Gunter Oettinger for member states to postpone any offshore drilling plans so that the EU can assess the situation in the wake of the Deepwater Horizon catastrophe off the Gulf of Mexico.

The EP’s resolution is aimed at putting more pressure on EU energy ministers to declare a full-blown moratorium when they meet soon to discuss and decide upon the subject.

The EP’s Environment Committee last week voted in favour of the resolution. No Maltese representative was present during the vote, since Labour MEP Edward Scicluna – a substitute member on this committee – could not attend due to a simultaneous meeting of the Economic and Monetary Affairs Committee. However, as a substitute he does not have a vote in the Environment Committee.

A spokesman for the Resources Ministry, which is responsible for Malta’s oil exploration policy, refused to state the government’s position on a possible moratorium.

“Malta is in favour of reviewing existing legislation on the permitting of offshore drilling activities in extreme conditions,” the spokesman said.

He added that such revisions should take into account the outcome of the investigations into the huge BP oil spill off the US and to continue to evaluate activities on a case-by-case basis.

Although Malta does not have an oil industry, a moratorium at this stage could disrupt plans by two licence holders to start drilling offshore oil wells in Maltese waters.

Malta has two active licences for oil exploration and drilling in its waters, allocated to Heritage Oil in December 2007 and Malta Oil Plc Limited in July 2008.

So far, both companies have only performed exploration activities in the areas allocated to them, although both have publicly stated they intend to start drilling soon.

Heritage Oil said that from studies it has carried out, there is potential of finding 500 million barrels of oil in the two areas allocated to the company in the south of Malta close to the disputed Medina Bank. Malta Oil Plc said it intends to start drilling in at least one of its four offshore blocks by the end of this year, also located to the south of the island.

However, the Resources Ministry spokesman said “there are no ongoing negotiations” on the granting of new licences for exploration and drilling.

The EP resolution calls for the EU to learn the lessons of the BP oil disaster and ensure high safety standards are respected wherever there is exploration for oil on the seabed.

The resolution also states it wants clarity on the EU’s capacity to respond to an oil spill, as well as assurances that polluters would be held legally responsible. Victims, such as fishermen, should be properly compensated.