Plans by Heritage Oil to drill an exploratory oil well in the continental shelf disputed by Malta and Italy are on hold amid reports of an informal moratorium agreement between the two countries, the Times of Malta is informed.
Sources close to Heritage Oil told this newspaper the licence granted by the Maltese government in 2007 was still valid but they could not proceed with any drilling until the dispute between the two countries was settled.
Heritage Oil, by the end of 2012, concluded seismic studies in the area and identified the spots where it thought commercial oil and gas reserves could be found.
The area, which covers blocks 2 and 7 of Malta’s continental shelf, is the most unexplored zone of the island’s seven blocks. Surveys followed by 2D seismic data indicated “a highly attractive lower eocene carbonate reef play”.
Located to the southeast of the island, the area is considered to have the highest potential of oil discoveries due to its close proximity to massive offshore fields belonging to Libya and Tunisia. Only one well has ever been drilled in the area and even this was not completed.
These primary targets are recognised as major hydrocarbon producing zones in the central Mediterranean
Media Bank-1 started being drilled in 1980 under the Mintoff administration but the Italian rig doing the job had to abandon its project halfway through the process as Libya sent patrol boats ordering the operations to stop. This led to a massive diplomatic rift between Malta and Libya.
Since then, no exploration took place in the vast 18,000 square kilometre zone and Heritage Oil was planning to drill its first well in 2013.
According to Heritage Oil latest strategic report: “These primary targets are recognised as major hydrocarbon producing zones in the central part of the Mediterranean.”
The Sunday Times of Malta reported that talks between Prime Minster Joseph Muscat and his Italian counterpart, Matteo Renzi, led to an informal agreement between the two countries not to issue any new licences or drill any wells in the disputed area until discussions on possible joint exploration are concluded. Italy even raised the issue of the Heritage Oil licence with Malta. This followed the unilateral decision by the Italians to extend their continental shelf to the southeast of Sicily stepping on vast areas of Malta’s continental shelf.
Although at the end of 2013 both Malta and Italy declared they were close to an agreement on joint exploration, this has not materialised yet.
The Office of the Prime Minister would not comment when asked about the informal moratorium agreement. However, both Italy and Malta have strongly dismissed suggestions by the Italian media that there was an informal agreement linking the taking of migrants by Italy and oil exploration licences.