Government grants oil exploration licence extension

Mediterranean Oil & Gas, a company which holds a licence to explore for oil in Maltese waters, said today that it has been granted a six month extension to the production sharing contract by the government.

The agreement covers Area 4 Blocks 4, 5, 6 & 7 ("Area 4").

"This extension will enable the contractors to the Production Sharing Contract (PSC) to have sufficient time to complete the exploration drilling activities that are forecast to start in Q1 2014. With this extension, the expiry of the first exploration period to the PSC is now 17 July 2014."

Bill Higgs, Chief Executive of Mediterranean Oil and Gas, commented:

"We appreciate the continued support of the Maltese Government as we prepare to drill the Hagar Qim 1 exploration well with our partner Genel Energy."

"The first half of 2014 will be an important time for the company with the drilling of two exploration wells; one offshore Malta Area 4 and one onshore Italy. This increased activity is an important step forward for the company."

The company was granted another extension, of one year, last year.

In February the Times of Malta reported how drilling of Ħaġar Qim 1 had been due to start in the last quarter of 2013.

Dr Higgs had told the newspaper in 2012 that the company was very excited about the seismic data, which gave strong indications the area may contain anything between 130 million and 200 million barrels of oil.

“This area has never been explored but the information we have obtained has given us enough confidence to move ahead with the drilling of two exploratory oil wells,” Dr Higgs had said.

Area 4 is situated in the zone where the sea border with Libya was delineated by the International Court of Justice in 1985.

The oil well, 150km south of Malta, is expected to be 2.5 kilometres deep and it will take 60 days of drilling to reach the potentially oil-rich area.



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