Dr Robert Abela, lift our sunken treasure chest

Experts predict that 2020 will see oil prices slowly escalating and may reach sustainable levels to attract attention of oil companies to continue exploration in Mediterranean.

It is common knowledge that any loss of supply from Iran due to increased U.S. sanctions will exacerbate the pressure on oil prices and it is unlikely that OPEC intervenes to increase output in the interim.

The steep losses from Venezuela combined with the potential disruption in Iran, linked to warfare in Libya could push the oil price to reach new heights.

Last year, Cyprus proudly announced it signed its first natural gas exploitation deal worth $9.3 billion with a consortium comprised of industry giant Shell, US-based Noble and Israel’s Delek.

The 25-year license is for the Aphrodite gas field, the first to be discovered off Cyprus, by Texas-based Noble Energy, in 2011. It is estimated to contain over four trillion cubic feet (over 113 billion cubic metres) of gas.

The re-working of the production contract means Nicosia is set to receive tax/royalties income of $520 million annually over an 18-year period. Comparisons are odious, but this equates to the annual income Malta expects from running the Citizenship by investment scheme albeit the Cyprus windfall stretches for a much longer-term.

Last February, ExxonMobil and Qatar Petroleum discovered an even bigger natural gas reserve off the coast of Cyprus, holding an estimated five to eight trillion cubic feet. Italy’s ENI and Total of France are also heavily involved in exploring for oil and gas in a number of fields offered for exploration - off Cyprus.

One acknowledges that it took Cyprus almost a decade since it discovered oil in the Aphrodite well to start monetising its worth. The question, one may ask is why Malta has not followed suit and wasted opportunity during the past thirteen years.

The honest truth is that during the PN administration (later followed by the Muscat government) there was no serious drive to attract investment to explore our waters.

Ex-prime minister Muscat when elected in March 2013, had set his mind to help push the Henley & Partners passport scheme, which to date saw about 1500 applicants approved and in the process each invested around euro 1.5 million.

In hindsight, IIP scheme has helped balance annual state deficits and left us today with a tidy sum of euro 600 million albeit laced with unsavoury criticism from Brussels. Muscat had no time for oil and gas exploration as the next rabbit in his magic hat was the private deal with Socar (owned 33% by the state of Azerbaijan) and equal shares with Tumas/Gasan groups and Siemens to build an LNG electricity facility (costing circa euro450 million).

This turned out to be a highly criticized deal which bound Enemalta (for 18 years) to buy electricity at a fixed rate exclusively from Electrogas.

When during installation, its shareholders were cash stuck with bankers, many quizzed why the finance minister issued a temporary bankers’ guarantee for euro 350 million to bail them out. Fast forward to 2020, we may recall how talks are in an advanced stage with EU to help lay a gas pipeline direct to Gela Sicily.

Gela is itself a rich offshore region. Equally interesting is our main source rock for oil as experts say it is expected to be rich in the organic Streppenosa oil shale unit which is designated world-class in its prolific oil generating capabilities. No wonder, the rich Sicilian Vega oil fields to the north have an estimated resource of one billion barrels of oil in place, located only 20km away.

Needless to say, experts predict that the proximity of similar concessions and similarity in geology to the producing basins of Tunisia and Sicily lend support to the theory that oil strikes for Malta cannot be excluded. The “intra-basin” ridge trend offers a new and highly prospective oil strike in our waters. Mediterranean Oil and Gas (MOG) in 2005 was awarded a license to explore for oil and gas had commissioned a specialist operator to shoot seismic survey and it succeeded to interpret an extensive long-offset 3D view over the area which looked promising (yet no positive announcement has ever been issued).

Geologists tell us that this part of offshore site which is geologically analogous to the Libyan Sirte Basin, appears to contain analogues similar to proven producing fields in Libya in addition to those in offshore Tunisia.

Mysteriously, governments have not exploited the rich heritage of scientific surveys at our disposal which were carried out over the years yielding imaging of the Cretaceous and Jurassic sequences - enabling several large leads to be defined at this stratigraphic level.

This legacy of seismic data and sporadic drilling was collected from various companies including BP, Texaco, Genes, and Eni since the 50s.

Four years ago, there were strong rumours that a National Oil Company is to be set up to help promote upstream business but so far the idea seemed to have been shelved.

Three years ago, it was thanks to a scoop by the Times of Malta (TOM) which revealed that the government appears to be trying to start a new push for oil and gas exploration in Maltese continental shelf after a hiatus of seven years.

TOM quoted that the official journal of the European Union issued a notice says that Blocks 1, 2 and 3 of Area 3, an area of 6,000 square kilometres north of Malta, are now available “for authorisation on a permanent basis under either an exploration licence or an exploration and production licence”.  No major oil investor has hit the ground with a fat cheque book.

With hindsight under the Muscat administration, we have rightly explored new sectors such as blockchain and AI. The ambitious slogan Malta - the blockchain island saw mega conferences funded partially by government and were successful in attracting thousands of evangelists and tech enthusiasts.

Obviously, this tech sector is volatile, highly competitive and carries a long gestation period. Back to the black gold - can Robert Abela the energetic prime minister, reopen this forgotten treasure chest and reconstitute a NOC empowered with experienced geologists and experts to turn the tide.

Readers may say finding oil is a taboo subject yet realists assert that provided sufficient capital is invested in exploration using modern 3D and AI technology, then success will grace us - as it did for other countries in the Med.

Success will breed more success but Dr Abela must pluck up courage to focus our energies to attract bona fide investors. If Cyprus and Israel attracted American capital to fund serious exploration - so can we.