Malta could become a “mini North Sea” if all the oil and gas activity being planned in the Mediterranean takes off, Medserv director Anthony Duncan has said.
He believes that Medserv is ideally located to benefit from this, both geographically and experience-wise, noting that there were currently 18 rigs in the Mediterranean with two to three more being brought in every year.
“We have been active in this industry for years and although the activity would undoubtedly bring with it competition, we would benefit from being already established and already successful,” he said.
Medserv is issuing a €20 million bond offer – in tranches – which it intends to use to finance its expansion. Part of its lease obligations mean it will use around €5 million of the first tranche locally. It has already announced that it will be investing in a €4 million photovoltaic set-up, with €1 million to be spent on a crane and an engineering set-up for rigs which will be the only one of its kind in the Mediterranean.
This would bring considerable business to Malta – and Mr Duncan’s concern at the moment is that the 50,000 sq.m. site adjacent to the Freeport is actually full.
“If necessary, we will temporarily move the staff car-park to the main road,” he said.
Medserv was bankrupt when he and Anthony Diacono bought it in 2003 (they own 75 per cent of the shareholding). Things have improved considerably and he sees no reason why Medserv should not be profitable for the next five to six years.
It went through difficult times when its operations in Libya were brought to a standstill by the revolution there – and its base in Misurata is only just ticking over – although a maintenance unit for offshore activity is quite profitable.
Mr Duncan believes that the situation there is still unstable but forecasts that it should settle down within two years. “However, the Maltese are still very present and our understanding of the Libyan way of doing business is crucial for us,” he said.
Medserv is eyeing new activity in countries such as Cyprus, Sicily and Ghana.
“Our bid for Cyprus – which has found huge gas deposits – will go in by the end of September. We already hold licences to operate in Limassol and Larnaca and are currently negotiating to get more land,” Mr Duncan said.
Of course, it is also keeping a close eye on Malta itself and is crossing its fingers that its bid to Med Oil and Gas in connection with exploration here will meet with success.
Mr Duncan believes that the investment resulting from the money raised by the bond will help the company to expand and diversify, which will spread its risk across different operations.
“A company is a live thing. If it is neglected, it will die. I spent a considerable amount of time in Aberdeen and saw numerous companies grow from nothing to billion-pound entities within decades. This is a profitable business; you just need to know what is required and ensure that you provide it – professionally.”
The bond issue was confirmed last week and the prospectus, which will give details of the coupon rate, will be available next week.
The Group registered a profit before tax of €566,485 compared to a loss of €680,589 sustained in the six-month period to June 30, 2012. After accounting for taxation the net profit for the period to June 30, 2013 amounted to €504,450 compared to a profit of €9,765 for the six-month period ended June 30, 2012. No interim dividends were recommended, although it has paid a final dividend every year except 2008 and one is expected this year.