Malta grants Albion Energy exploration study licence in contested areas

Albion Energy has been granted an exploration licence by the Maltese government to carry out geological studies in two areas to the southeast of the islands.

The licence is for offshore Areas 2 and 7 over which there have been competing claims by Italy and Libya over the years. The two areas cover 18,000sq.km on a part of Malta’s continental shelf that includes the Medina Bank.

The government entered into a two-year exploration study agreement with Albion Energy Malta Limited with a possibility of extending it by a further two years, subject to an additional work programme.

The Finance Ministry, which is responsible for oil and gas exploration, said in a statement that the work obligations for the first two years consist of geological and geophysical studies on existing data.

Albion Energy Malta is fully owned by Albion Energy Limited owned by Tony Buckingham, who is no stranger to exploration in Malta.

Buckingham had founded Heritage Oil that was awarded a concession to carry out studies in the same two areas back in 2007. However, the company was asked to stop operations by the government after Italy laid claim to the area in 2015.

Eventually, Buckingham sold Heritage Oil and despite having a site that was drill-ready, nothing ever came off it.

The Maltese government has not said whether the disputes with Italy and Libya have been resolved.

In 1980, Libya had sent gunboats to stop oil drilling operations in Area 2 after Malta granted an exploration licence to an Italian company. Libya claimed the area for itself and the issue ended up in front of the International Court of Justice.

The court eventually ruled on where the median line between Malta and Libya stood but this was limited to a small area that did not extend all the way to the east.

Italy had intervened in the court case because it also had competing claims to Area 2 and Area 7.