Geologist questions timing of new oil exploration call

As Malta launches a new bid to lure companies into applying for oil exploration licences, geologist Peter Gatt, whose studies focus on Malta’s oil potential, believes the government should first reach a conclusive agreement with Libya.

Last month, Malta issued an international call for applications for oil exploration licences for zones which include areas where Malta is not the only country which claims to have jurisdiction.

So far, the government has not announced any agreements with the new leaders of Libya about oil but the two countries have agreed to reconstitute a joint commission to discuss relations. Among many other items, the commission will also discuss oil exploration, including the possibility of joint oil exploration.

Mr Gatt thinks the government may be undertaking “an exercise in fantasy” because it is trying to attract companies to drill in disputed areas without first assuring that other countries have renounced their claim on parts of Malta’s seabed. Among the zones the Resources Ministry earmarked for exploration in its announcement two weeks ago was Area 5, which is claimed in parts by both Libya and Tunisia. Disputes about ownership characterise most of Malta’s offshore area and on one occasion Libya had come close to military aggression to defend its claims.

“I don’t think it’s a coincidence that the government issued this call for applications around the same time it recognised the National Transitional Council,” Mr Gatt says.

According to him, Malta has either reached an agreement with the NTC or is presuming it can proceed with drilling unhindered and without reaching an official agreement because the Libyan navy and air force are at present incapacitated.

“If they reached an agreement they would have announced it as good news... unless we’re going back to the time when we made secret agreements with North Korea. Alternatively, the government is presuming that, with a new Libyan government, we can drill in these areas. But on what basis? I think the new Libyan leaders will be just as forceful as the old ones when it comes to oil. After all, Libya is a hydrocarbon country,” Mr Gatt says.

He feels Malta should not have recognised the council unconditionally, before reaching an agreement with Libya on oil exploration. “It is awkward to recognise a government when they have not yet recognised your frontiers.”

He believes Malta has been “a total failure” in terms of oil exploration even though all the evidence suggests the island is no different to Sicily, Libya and Tunisia in terms of its oil potential. “In 50 years we have drilled 12 wells. Tunisia has drilled more than 18 wells in one year,” he points out.

Half of Malta’s wells were drilled wholly or in part by ENI, the national oil company of Italy, which as a direct competitor does not have any interest in Malta finding its own oil, he says.

Meanwhile, Malta has also dismantled its Oil Exploration Department and replaced it with an office within the Malta Resources Authority, which is meant to be the regulator.

“Is the regulator going to attract oil companies? No. The regulator’s job is not to attract operators.”

Mr Gatt also claims there is huge chaos in terms of the data collected over the years and there does not seem to be any initiative to organise this data to make it more useful.

Asked if the government had discussed oil exploration with Libya’s transitional council and come up with an agreement regarding the disputed zones, no answer was forthcoming from the Office of the Prime Minister.

Instead, a spokesman for the Prime Minister repeated a statement made recently by Lawrence Gonzi stressing that the country’s priority is “the attainment once more of the ­stability in all the Libyan territory”.

The Resources Ministry failed to answer questions on whether oil exploration took place in undisputed zones, whether talks about disputed areas were held and on the dismantling of its oil exploration department.

“The government, through the LN (legal notice) just published regarding exploration licences, is continuing to promote oil exploration opportunities in offshore Malta. Malta has already production sharing contracts with two companies,” the ministry said in a brief reply.