The government will soon publish a notice in the Official Journal of the European Union notifying that Area 4 is once again open for companies interested in oil exploration.

Phoenicia Energy Company Ltd and Melita Exploration Company Ltd completed the contractual obligations of the first exploration phase.

They were then granted a further six months in order to evaluate the results of the tests carried out on the Hagar Qim well last summer but decided to terminate the contract on Sunday January 18, rather than to initiate a second exploration phase.

Sources familiar with the government’s intentions said that promotional efforts will continue in the sector.

“It is only through further exploration that one can truly evaluate the potential of Malta’s offshore acreage.

“Clearly, the fact that Phoenicia Energy Company Ltd and Melita Exploration Company Ltd will not pursue further exploration in this area will not be very encouraging when it comes to attracting other companies.

“We have to bear in mind that exploration is very costly and when the price of oil goes down – crude is at the lowest price since 2009 – then this is the first area that oil companies will cut back on. So we have to be pragmatic about whether the government will find any takers for the area.

“The issue is not just about finding oil but about finding oil that is economically feasible to drill at the current cost of crude.

“Having said that, the government will continue to collect new data whenever it can and to correlate it with the data already available.”

At present, the only other activity in Malta is in Area 3, a 6,000 sq.km area where Cairn Energy its JV partner Melita Exploration Company (a wholly-owned subsidiary of Rockhopper Exploration PLC) is at the moment processing a 2D broadband (seismic) survey on just over a fourth of the area, expected to be complete within the coming months.

The results will determine whether the partners commit to a 3D survey under the 2012 exploration study agreement.