An exploratory well is about to be drilled 130km to the south within a few weeks, with results due by as early as July, Infrastructure Minister Joe Mizzi said today.

Speaking during the Economist Business Roundtable at the Hilton, which was attended by over 300 of the key decision-makers in Malta, Mr Mizzi said he firmly believed that there was petroleum in commercial quantities.

Although there have been numerous attempts to find commercially viable gas and oil, this was the first time a well was being drilled in deep waters.

The government offered a number of incentives to companies to drill in ‘deep water’, with a 50 per cent investment allowance to recoup their investment if oil or gas were found.

The minister also said that seismic surveys were being held to check oil and gas prospects that might have been overlooked in the past. He said that if the results were positive, the government would then have to negotiate a licence.

The director general within his ministry, Albert Caruana, explained that there are two forms of agreement for licensing in Malta either through an exploration agreement or through a production sharing contract.

Companies normally first enter into an exploration agreement to carry out seismic exploration and evaluate the acreage and if the results are positive then they convert to a production-sharing contract.

Mr Caruana said that Cabinet last week approved the overhaul of the Continental Shelf Act which was long overdue, as well as on the Production Act which would be revised to bring it in line with industry practice.