Conrad Mizzi, right, signs the agreement on behalf of Malta. Photo: Darrin Zammit LupiConrad Mizzi, right, signs the agreement on behalf of Malta. Photo: Darrin Zammit Lupi

Malta has entered into an agreement with Libya to buy oil, fuel and gas at discounted rates which can translate into a better deal for consumers.

Prime Minister Joseph Muscat hailed this framework agreement as “groundbreaking” as it would help the ailing energy corporation, Enemalta, and shield consumers from unpredictable spikes in the international price of oil.

The deal was announced yesterday at the end of a brief official visit by Libyan Prime Minister Ali Zeidan and a delegation of his ministers.

The oil-rich North African neighbour has undertaken to furnish Malta with crude or refined oil, petrol, diesel, jet fuel and even LPG gas – the sort used in homes – at preferential prices and credit terms.

The two sides also agreed in principle on the possibility of carrying out joint oil exploration in the disputed sea borders areas – a thorny issue that has dogged diplomatic relations between the two countries for decades.

Malta also committed to provide English-language training to oil and gas workers and to upgrade the Libyan school in Ta’ Giorni for this purpose.

Though this was independent from the Government’s plans to convert Enemalta’s power stations from oil to gas, Dr Muscat said the deal formed part of its policy to place the corporation on a sound footing.

Enemalta is still in a bad shape. This agreement will help address this and provide consumers with a cushion

“Enemalta is still in a bad shape, its credit rating is not good and this affects the credit rating of the country at large. This agreement will help address this and provide consumers with a cushion,” Dr Muscat said.

He thanked Mr Zeidan for the “lightning speed” with which the agreement was reached, adding he was “impressed” with how the Libyan side came through “practically weeks” after his visit to Tripoli on July 15.

The details of the arrangement, including practical considerations such as how the oil products will be imported and from which refineries, will be ironed out in the coming months through meetings between both sides.

Moreover, there is the practical problem of Libyan oil production being well below its peak at the moment due to a recent blockade on its refineries, pipelines and oil ports by workers and armed militias who are demanding regional autonomy.

Some facilities have reportedly returned to normal but it will be a while before the situation settles down across the country. Last night Reuters reported that the country had even resorted to importing fuel to make sure its power stations keep working (see story on page 11).

On this point, however, Mr Zeidan said his government was committed to seeing the deal implemented and to boost the “oil and gas” relationship between the two countries.

From the Libyan perspective, the arrangement follows a similar deal struck with Tunisia and an offer to Egypt.

“For us, it was natural to move forward on such an agreement with a neighbour,” Mr Zeidan said.

Dr Muscat also spoke about a medium- to long-term objective for Malta to serve as an energy supply station for Europe from Libya. He pointed to the availability of EU funds for a gas pipeline and linked it to the idea of connecting Europe to North Africa via Malta.

He also underlined the inclusion of jet fuel and LPG gas into the equation. He said the Government would now speak to Maltese suppliers of bottled gas to see how this deal could be translated into savings for the consumer.

The two sides also spoke about irregular immigration, visas and the possibility of increased cooperation in the health sector.

Both prime ministers renewed appeals to Europe for help with this problem.

Dr Muscat hoped the two countries could pick up on initiatives in this area with Italian and Greek counterparts in the coming weeks to give Libya the support it needs.

Asked what sort of help Libya was asking Europe for, Mr Zeidan said his country mostly required expertise on security and investigation, pointing to the continuing security threats Libya faced in the wake of the 2011 civil war.

Libya never managed to disarm its population after the war and some militias often clash with government law and order forces in a constant power struggle.

Mr Zeidan said a number of attacks and killings carried out over the past months in Libya were the “work of terrorists”. As with immigration, this problem is exacerbated by the challenges that the country faces in patrolling its vast borders to control who enters the country.

Asked by Times of Malta if he saw the immigration phenomenon to be primarily a security problem rather than a humanitarian one, Mr Zeidan said it was both.

He said his country was committed to help find a solution at source that saw immigrants return to their place of origin in a safe context but insisted Libya needed Europe’s help in this respect.

“We have spoken to our European counterparts about such projects which have not been implemented. This is the sort of help we need,” he said.

The Nationalist Party welcomed the memorandum of understanding that would lead to preferential oil rates from Libya. This was the fruit of a previous government’s contribution to help the Libyans during the 2011 uprising, it said.

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