The government was misled into investing €33 million into drilling an oil well in Gozo in 1998 – the Madonna taz-Zejt well – in a location that was ill-advised and to depths far beyond those in which oil could conceivably be found, according to geologist Peter Gatt.

Dr Gatt is adamant that those who advised the government at the time should be held accountable, noting that they were clearly wrong in accepting the argument that the well had to go far deeper down than any other well in the Mediterranean.

Just 12 wells have been drilled in Maltese territory so far: the first was drilled in the outskirts of Naxxar in 1959, five years after an exploration licence was granted to D’Arcy Exploration.

The Madonna taz-Zejt is the only other well to be drilled in the Maltese islands. It is the second-most recent oil exploration effort in Maltese waters: the only other well to be drilled since was the Lampuko well, which was drilled in 2002 off the coast of Gozo by Italian parastatal oil company Eni.

Dr Gatt points out that the number of wells drilled so far is very low, if neighbouring countries are any indication. If the density of oil wells in Malta matched that of Italy, for instance, over 200 wells would have been drilled by now, and the chance of finding oil would have been that much greater.

The geologist stresses that he is very much in favour of oil exploration, and that the potential is clearly there.

But he also insists that the drilling of the Madonna taz-Zejt well was a massive, costly blunder.

A few kilometres too far

The well, which was drilled in the outskirts of Kercem, stands out for a number of reasons.

It was the only well drilled using Maltese government funds – and not those of the oil company drilling it – although the funds themselves came from Italy, through the 4th Protocol on Technical and Financial Cooperation with Italy signed in 1997.

These funds effectively made their way back to Italy: Saipem SpA, a subsidiary of Eni, was awarded the contract later that year. Drilling began in 1998, under a Labour Party government, and concluded a year later under a Nationalist Party government.

But the well also has another distinctive feature: it is the deepest well ever to be drilled in the Mediterranean Sea.

The original plan was to drill a well 5,000m deep, but this depth was soon revised to 6,000m. However, there was a further change of plans, and drilling only stopped when a depth of 8km was reached.

In contrast, the nearest productive oil wells – in the Vega oil field in the Sicilian Channel – typically reach a depth of 2.5km.

According to Dr Gatt, this is where drilling in Kercem should have stopped, as it should have been clear that no oil would be found further down.

Yet the government accepted calls to drill further down, even though there is a good reason no other nearby well went so far.

“It is impossible to find oil at a depth of 8km in the central Mediterranean,” Dr Gatt maintains.

At such depths, he explains, oil can only be found in exceptional situations. In the Mediterranean, where the earth’s crust is relatively thin, the temperature at such depths would be too high.

Geological features suggested site was unwise

But the decision to dig far deeper than was necessary was not the only mistake to have been made. According to Dr Gatt, the site’s surroundings also provided strong evidence that a significant oil find was not likely to happen in Kercem.

The main argument Saipem used to persuade the government to commission the Gozo well was that the oil-rich Ragusa basin extends close to the northern shore of Gozo.

However, Dr Gatt contends that this is a fallacy, citing Italian geological maps which were produced several years before 1998, which show that the margin of this basin is actually some 100km away from Gozo.

Dr Gatt expresses concern at the fact that the government apparently had no geological experts to rely on to challenge Saipem’s “flimsy” explanation.

He notes that oil-rich sediments associated with the Ragusa Basin have not been found in, or anywhere close to, the Madonna taz-Zejt well. Nevertheless, he adds, this “geological fallcy” kept being repeated up to 2005: the Lampuko well itself was said to be situated on the southern end of the Ragusa basin in 2002.

But there was another issue with the site, concerning what is known as the seal.

Petroleum is lighter than either rock or water, and as a result, it will generally flow upward until it reaches the surface or until it is trapped by an overlying layer of impermeable rock: the “seal” in question. Where such seals are present, any underlying oil deposits will tend to accumulate where structural highs – geological features such as crests, anticlines or domes – exist, creating the oil reservoirs drilling efforts hope to locate.

According to Dr Gatt, the Madonna taz-Zejt well did seek to exploit a “very narrow” structural high. However, he adds that there was obvious evidence suggesting that the seal which would have trapped oil reserves had been broken a short distance away.

This evidence can be found in Dwejra, just a couple of kilometres away. The site is characterised by numerous circular sinkholes – the inland sea and nearby Dwejra Bay are the most visible examples, but at least six have been identified, including underwater.

These sinkholes are caused by the infiltration of water which dissolved an underlying layer of gypsum, which caused the overlying rock to collapse. 

But while this phenomenon helps put Dwejra on the tourist maps – Dr Gatt himself has argued that the area should be designated a geopark – it also spells bad news for oil exploration efforts nearby. This gypsum layer, Dr Gatt explains, would have served as the seal which would have trapped substantial oil deposits beneath.

As it turns out, the nearest the Madonna taz-Zejt well came to striking oil was the discovery of bitumen, a semi-solid or highly viscous mixture of hydrocarbons whose extraction would have been uneconomical.

Project aim ‘to spend the money’

The well’s €33 million price tag is very high for an onshore well, Dr Gatt points out: the same funds could actually have been used to dig another well or two, if the drilling was stopped at a more reasonable depth. There are other structural highs that may be worth exploring, he adds.

Add the possibly unwise choice location to the mix, and he concludes that Malta, effectively, squandered €33 million that could have been spent elsewhere.

Dr Gatt emphasises that Saipem itself had suggested that the well should go deeper – thus increasing the government’s costs, and its own revenue – and that the Italian company would have been well aware that there was no point in doing so.

“The government was given the wrong advice, and spent €33 million as a result... imagine the commissions behind that sum,” Dr Gatt notes.

“It is quite clear that the aim was to spend this money, for the benefit of Italy,” he adds.

Dr Gatt also raised another interesting point: that the top official responsible for Malta’s oil exploration efforts at the time has been called for questioning by the Public Accounts Committee about fuel procurement procedures.

Lessons learnt?

As it turns out, the minister presently responsible for oil exploration – Joe Mizzi – is the same one who oversaw the launch of the Madonna taz-Zejt project 15 years ago.

Although Mr Mizzi may hold political responsible for the decisions taken, Dr Gatt’s prime concern is not the minister, but whether the government can now rely on better guidance this time round.

And he is sceptical. As he points out, Mr Mizzi has noted that the Oil Exploration Division was in a state of disaster when he took office, but Dr Gatt also adds that there is no indication that the situation has changed. Which would mean, according to the geologist, that the government continues to act on the advice of a department in disarray, one with a €33 million blunder to its name.

The findings of the Madonna taz-Zejt project remain under lock and key, as neither the government nor Saipem have been willing to make it public.

Past governments have also proven to be unwilling to publicise oil exploration data, in contrast with practically every other country in Europe. Dr Gatt argues that publicising such information was in Malta’s interest, as it would help attract oil companies, and that even paranoid regimes such as Saddam Hussein’s Iraq were more forthcoming with their data.

The minister responsible for oil exploration – Joe Mizzi – has stated that he would be willing to make such data public, but Dr Gatt notes that his own request for information has gone unheeded.

Would-be investors, of course, face the same lack of information, and any plans to explore for oil in Maltese territory would have to be a bigger gamble than necessary.

The government has announced that oil exploration is attracting unprecedented interest, but this only raises more questions for Dr Gatt, who questions why companies would choose Malta over neighbouring countries that offered a much safer bet through the information provided.

He points out how in 2007, Heritage Oil was granted a sizeable concession, covering what are known as Area 2 and Area 7 to Malta’s east, only for the company to repeatedly postpone its promised oil exploration efforts. Its licence had actually expired, only to be renewed by the government.

Dr Gatt questions the advice the government is receiving over potential investment by oil companies. But then again, given past experience, it is unlikely that he expected things to be much different.