Malta is in the final stages of negotiations to grant a foreign company an oil exploration licence in an area to the south of the island.

The Times has also learnt negotiations are under way with two other companies over granting permission to drill oil and gas exploration wells in two more areas.

Following an international roadshow conducted by the Malta Resources Authority last year, several companies expressed an interest in acquiring these licences.

The Government is holding negotiations with three of the applicants.

“We are in the final stages of concluding on one licence while negotiations on another two are also at an advanced stage,” sources said.

At the same time, The Times has been informed that Heritage Oil International, which in 2007 was granted a licence to explore two areas in the south of Malta until the end of this year, has asked to extend it.

The area under licence to Heritage Oil is still engulfed in an international dispute as neighbouring countries, particularly Italy, Tunisia and Libya, have all shown an interest in the sector even though Malta insists it has jurisdiction there.

In the area now under Heritage’s licence, a dispute with Libya was taken all the way to the International Court of Justice in the early 1980s when Libyan gunboats intervened to stop a Texaco oil rig from continuing to drill.

Sources said a Government reponse on Heritage’s extension request was expected shortly.

The latest revival in Malta’s long bid to find oil and gas reserves follows the acquisition by Genel Energy – an oil exploration company listed on the London Stock Exchange – of 75 per cent participating interest in Area 4 offshore Malta held by Mediterranean Oil and Gas (MOG).

Plans are under way so that as soon as MOG is given the green light by the Government, a well will be drilled in 2013.

According to Genel Energy, which is led by the former CEO of BP Tony Hayward, seismic studies have indicated good potential for oil and gas finds in the area with geology similar to the Libyan Sirte basin.