Maltese company Ablecare Oilfield Services has been chosen to regenerate the Malta Shipbuilding site into a maritime hub and will invest up to €55 million, over and above the lease concession.

The company, which has 14 years of experience in this field, specialises in the oil and gas industry.

Once developed, the site will be a centre for oil rig maintenance, storing heavy machinery and equipment, as well as logistic support for the oil and gas exploration industry.

The preferred bidder is also pledging to set up an academy to have a skilled workforce in the industry within four to five years.

This was confirmed by group managing director Paul Abela who spoke with Times of Malta about the company’s plan for this strategic site spread over 175,000 square metres.

Economy Minister Chris Cardona yesterday reiterated that the group would not be given the entire site following a recommendation of the Privatisation Unit Committee overseeing the bidding process.

We had a major company interested but they were appalled at the state of the site

Addressing a news conference at the Malta Shipbuilding, Dr Cardona said the area to be leased would be established during negotiations that would start soon.

As for the remaining part that will not be included in the concession, the minister said no decision had been taken yet.

Though the government’s offer was to lease the site for 45 years, Dr Cardona said there was a possibility this would be shortened.

Last March, 40 consortiums showed interest in the site and 28 collected the documents, but only six went on to submit bids.

One of these – Ablecare Oilfield Services Group – was for the whole of the site, with a proposal to use it for the oil and gas industry. The other five were for just parts of the site and it is understood that the only one called in for further talks was Melita Marine Maritime Hub Consortium; but these never progressed.

Ablecare Oilfield Services Group is already using part of the facility under a temporary agreement reached in October 2013, which has since expired. More than €1 million has already been spent on upgrading the site to make it suitable for this sector.

Outlining the group’s plans for the site, Mr Abela said the project would start with the dredging of the area, to remove over half the five metres of silt to bring the draft back to 12 metres.

We estimate it would cost €12 million. If the depth is improved, Malta could be one of the main sites for this sector

This will allow bigger rigs to use the facility, he noted, adding that a lucrative rig contract had been lost for this reason in the past few weeks. Rig stops cost some $50 million to $80 million each, leaving some €20 million in the local economy.

“We had a major company interested but they were appalled at the state of the site,” he said.

“We spent €500,000 for a study of the seabed and another €500,000 to prepare the site and it paid off, as they were happy with the outcome.

“But much more needs to be spent. We estimate it would cost €12 million. If the depth is improved, Malta could be one of the main sites for this sector.”

Malta has hosted rigs before at Palumbo’s yard, with Freeport also hosting some minor repair contracts. Medserv is also very involved in the ancillary services such as storage. However, it is clear the Marsa site will offer a tremendous logistical opportunity.

“There are two quays which will be ideal for rig stops. But the dock is not suitable for oil rigs – although it could be used for supply vessels. The important thing is to have large open-air areas for storage and the sheds for engineering and maintenance,” he said.