Italy to start drilling for oil in Malta's back yard

In its website, Northern Petroleum writes: “Success should be well rewarded. The preliminary award of application d351C.R-.NP offshore Sicily, covering 100km², was important as it covers an extension to an existing mapped prospect with prospective resource potential in two reservoirs of 1.1 billion barrels. Three prospects are mapped in a permit adjacent to Tunisian oil and gas discoveries and contain a prospect with P50 prospective resource in three reservoir sequences of 425 million barrels.”

The news of an escalation in oil exploration in Malta’s backyard, not only demonstrates the urgency to search for oil supplies as the war in Libya continues to pose a serious energy risk to Europe and individual states, but seriously risks aggravating pending issues between Malta, Italy and Tunisia on territorial jurisdiction, apart from exacerbate serious environmental concerns.

The Malta-Libya-Italy oil plot thickened shortly before the crisis in Libyaerupted, as the Maltese government issued a formal letter of protest to Italy over concessions granted for oil exploration in part of the continental shelf around the islands of Pantelleria, Linosa and Lampedusa.

The reason for the protest was that Malta recognises part of the continental shelf as its own national territory, Foreign Minister Tonio Borg said in reply to a parliamentary question a Labour whip Joe Mizzi.

However, the Maltese government appears to be adopting an entirely different approach with regards to an almost identical dispute with Libya, over a reportedly oil-rich region on the continental shelf separating Europe from Africa.

MaltaToday revealed last January that the Maltese government had contacted Australian owned Heritage Oil Corporation for clarifications regarding a ‘cease and desist’ letter the oil exploration company received from the Libyan government in 2008.

The request had come hot on the heels of MaltaToday’s publication of stern correspondence issued by Col. Gaddafi’s regime to the oil exploration company in 2008, warning it not to conduct operations in a maritime area which Libya claims as part of its own continental shelf.

The claim directly threatens Malta’s own declared maritime territorial integrity, evidenced by the fact that the Government had just ‘ceded’ oil exploration rights over the same disputed territory in question.

The correspondence - dated on March 2008, a week before the general election, and only three months after Malta signed its contract with Heritage Oil - reveals the reason behind the apparent slowdown in offshore oil exploration, following the Government’s announcement of a contract with Heritage Oil Corporation in 2007.

MaltaToday is also informed that multinational oil exploration companies, such as Heritage Oil, are still bewildered by attempts by the Maltese Government to give the impression that there is no on-going dispute with the Libyan government.

This attitude, sources said, has led to widespread scepticism among multinational oil exploration companies that the Maltese Government is not giving an accurate picture of its oil exploration rights in the area in question.

In December 2007, the Group entered into a PSC with the Maltese Government for a 100% interest in Areas 2 and 7 in the south-eastern offshore region of Malta.

The licences cover almost 18,000 square kilometres and are situated approximately 80 kilometres and 140 kilometres, for Area 2 and Area 7 respectively, from the south-eastern Maltese coast in water depths of approximately 300 metres. The two Areas are close to a number of producing fields offshore Libya and Tunisia, which is another country Malta is still in talks within a Joint-Commission over disputed borders.

Environmental concerns

According to environmental groups in Italy, the crisis in Libya has triggered a huge demand from oil companies to start explorations in the Mediterranean basin around Italy, where prospects have been described as “optimal.”

The Italian government – considered until a month ago as a strategic partner in Libya’s oil production through ENI – has received more than 100 requests for exploration in the seas around the Sicilian coast.

An anti-drilling law that came into force last August in Italy - following the ecological disaster caused by the explosion on a BP platform in the Gulf of Mexico – is set to be by-passed by the Italian government itself that is now looking into the potential of reaping billions from prospected oil finds.

The law only prohibits off-shore drilling within 12 km from the coast, thus permitting platforms to drill exactly where they want, and shifting the environmental risk onto neighbouring Malta.

The ‘Atewood Eagle’ platform, commissioned by Audax is to resume operations 12 miles off Pantelleria, while Shell is expecting to increase production by some 500 barrels a day, and Hunt Oil has asked for permission to drill a few miles off the Isle of Ferdinandea.