Exploratory oil drilling is making headlines again but scepticism abounds. Like trying our luck at a lottery draw, we take the chance to strike oil but some remain hopeful.

It is possible that Malta’s exploration areas may prove fruitful one day, someday.

It may be popular belief that, if a sizable oil strike is made, it will solve all our problems. An inflow of petrodollars may solve some, it could exacerbate others and new challenges may emerge.

Without doubt, a sizable oil strike will have a positive effect on the balance of payments, public debts and other issues such as sustainability of the health, pension and social services.

What would be the effect on citizens’ expectations, attitude towards some jobs, the effect on the cost of living, adequacy of our infrastructure and the mobilisation of substantial numbers of foreign workers of all skill levels finding their way to this crowded rock?

It is probably wise to study other countries that have a relatively recent history of significant exploited oil or gas reserves and to analyse how petroleum finds have impacted on their economic, social and political well-being.

Petroleum does not always equate with an apparently serene, Abu Dhabi-esque scenario.

A number of oil-rich countries have diminished democracy or freedom. This goes some way to control citizens’ dissent but does it have to be that way to keep order once petroleum is discovered?

What model should we emulate and which should we be wary of and plan to avoid?

Whether Malta will ever strike oil or gas is still unknown. The effects on our island depend very much on the size of the reserves discovered and the production rate.

A small but commercially viable oil strike would help our economic problems but would not likely affect our social model.

More significant or large finds would create an upheaval that will change to the core the fabric of Maltese character.

Well-placed individuals or organisations would be in a position to dip their hands in the till and make an easy buck.

The wealth from oil will naturally trickle down to satellite groups of people orbiting around the oil industry. This wealth would not reach everyone unless handouts are given.

Citizens’ expectations are bound to increase. They will demand improvements in all manner of services.

They will also expect a ‘cut’ from the nation’s newfound wealth by demanding higher wages. In some sectors this will reduce the ability of industry to remain competitive, which could lead to factory closures and joblessness.

Petroleum does not always equate with an apparently serene, Abu Dhabi-esque scenario

The obvious fix would be to re-inflate the ranks of public service employees. This must be resisted to avoid long-term repercussions.

Social and unemployment benefits would be expected to become more generous (due to cost of living increases) with a consequent reduction in the incentive to get back into the job market.

Expectations for unavailable higher paid jobs would scar potential workers taking up lower paid or menial jobs. These could be filled by immigrant workers from Eastern Europe and Asia.

There may be hope in the market for low-quality housing littering the island when thousands of such immigrant workers require low-end accommodation.

There will also be a smaller influx of specialised oil workers demanding high-end accommodation. Will there be another building boom?

With substantial oil finds, Malta and the Maltese as we know ourselves today risk becoming a thing of the past and that will diminish the success of the tourist industry marketing model.

Will the grandiose architecture of Abu Dhabi and Shanghai tantalise the appetite of our leaders?

Wealth will also bring in immigrant workers of all skills, possibly at the expense of employing locals. There would be new, added pressures in water, electricity and transport not only from a bigger population but also from increased affluence. Malta’s carbon footprint would undoubtedly increase and stress on open spaces, agriculture, sewerage and water resources would follow.

Norway did very well in managing its oil wealth while still steering away from increasing dependences from carbon based energy.

There is a huge cultural divide between our Mediterranean and Norway’s north European mentality. I will not go into the psyche of the Maltese when it comes to dealing with our brand of civic responsibility, obligations and accountability. These would play a determining role on how our society develops if we ever strike significant amounts of oil.

In my opinion, preparing for the eventuality of an oil find is a necessity or we will risk losing what makes us what we are.

Our leaders should have an insight into the possible problems we could face so that mitigating policies could be implemented proactively.

Such a study will require a team of economists, sociologists, anthropologists and political analysts willing to study the scenarios seen in oil-producing countries.

In the absence of such studies, when the day of the oil strike finally arrives, it may be too late to implement corrective measures in time.

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