The media reported this week on a sensational statement given by Infrastructure Minister Joe Mizzi in Parliament who, in a cavalier way, reminded all and sundry about his prophetic prediction on oil in territorial waters. It is his opinion that there are good prospects in oil exploration. This pronouncement mirrors his declaration two years ago that oil and gas were present in Malta's offshore acreage. Needless to say, he reminded lawmakers that the advanced technology now being used is able to extract these fossil fuels successfully.
Perhaps it is opportune to remind readers about a bold initiative taken by the PN government following its re-election in 1998 to spend €33 million to drill an exploratory well named Madonna taz-Zejt in Gozo. Some might brand this as the first "fracking" attempt that failed. What is particularly strange about the Madonna taz-Zejt well is that, officially, it was eight kilometres deep and at that depth, you are not looking at conventional upstream drilling which is usually much shallower. But the Prime Minister advised ENI to go deeper as there would be a better chance of discovering gas reservoirs. Dr Peter Gatt, an experienced geologist, asks what went so wrong in the drilling saga that till now remains a mystery as both the drilling agent (Italian company ENI) and the government remain tight-lipped on the technical results. News on the drilling was initially reported to be positive yet the well was suddenly and unceremoniously sealed.
Malta does have gas potential according to Minister Mizzi, as other experts predict that the Malta Platform itself may have several gas reservoirs. This begs the question: why did the government decide to run the Delimara Power Station on imported oil instead of the cleaner gas? The million dollar question that follows hot on the heels of the MaltaToday scoop about the oil procurement scandal in 2012 is: why were the powers that be more interested in importing oil rather converting the plant to run on gas? Minister Mizzi told his peers in Parliament about improved prospects because of sophisticated technology that can be used. So why the dearth of investors since the hybrid "fracking" experience at Madonna taz-Zejt failed surreptitiously in 1998.
Perhaps all this can be seen in perspective and we can stop and reflect on the strong resistance to fracking being mounted in UK when there was a surprise rejection by Lancashire county council recently for what would have been the biggest round of fracking so far. Residents were jubilant about the decision to ban fracking saying that there was a number of missing facts in the official report supporting the industry. The chief of the task force in UK on shale gas remarked that it is too soon to say whether shale gas fracking would be a "good thing". Lord Smith of Finsbury said the industry had not been transparent enough and that it would take time to reassure the public about the technology. But Smith said that fracking would be acceptable if certain conditions were met, including a tightening of regulations and monitoring set out in a report from the task force on shale gas. The report found that fracking was safe, for human health and the environment, but only if properly regulated.
Perhaps in 1998 the government policy to drill onshore in Gozo as deep as eight kilometres was a precursor to modern fracking even though it is not clear whether special chemicals, sand and other fluids may have been forced pumped in the exploratory well shaft as happens today with modern fracking technology. Essentially, fracking technology is different from drilling for conventional upstream methods as shale gas is natural gas stored deep underground in fine-grained sedimentary rocks. It can be extracted using a process known as hydraulic fracturing - or "fracking" - which involves drilling long horizontal wells in shale rocks more than a kilometre below the surface. Massive quantities of water, sand and chemicals are pumped into the wells at high pressure. This opens up fissures in the shale, which are held open by the sand, enabling the trapped gas to escape to the surface for collection as was hoped it would happen in the Madonna taz-Zejt initiative.
Could it be that the government in 1998 was advised to abruptly cease operations due to warnings by technical experts of tremors or even the possible contamination of the essential water in the underground aquifer? This is a mystery that is buried deep in Isle of Calypso. Readers may well ask: what is the point to dig deep underground using fracking techniques when offshore exploration is cheaper and creates less damage to the ecology of the islands? The answer is that exploiting potentially vast shale gas deposits will help keep our energy costs affordable and cut consumption of dirtier oil.
We are still reeling from the disappointing news of the latest dry well (called Hagar Qim and located close to oil producing wells in Libyan waters), which was abandoned last year after Genel Energy invested heavily in the field by taking over the concession previously held six years before by MOG. An official Genel announcement on 4th July said the rig was instantly redirected to drill on the Sidi Moussa block off Morocco where it has a working interest. Tony Hayward, the managing director of Genel Energy, was reported to have said that the Hagar Qim well was abandoned ahead of schedule simply because the drilling operation was efficient. This is a story that begs clarification or possibly an independent inquiry to reveal the truth about the super fast drilling sequence. Before operations started, a Genel spokesman was reported to have confirmed that the exploratory drilling would last between 45-55 days. The sheer abandonment is a stark affair: what went so wrong that the well was plugged after only six weeks? What were the scientific results on core samples taken from the site? This and other questions may never be answered as the directorate at the ministry is rather secretive about the sector and rarely issues public announcements. To be fair, the ministry posted a full-time qualified representative on the rig to supervise operations and protect Malta's interest. It is tragic to recall how Hagar Qim which was the next well since 2002 to be drilled and 60 years since oil was discovered by Italy in the Vega area to the north of Malta, there were only 13 exploratory wells which all proved negative.
Peter Gatt says that in his frank opinion, it is this poor drilling record that may very well be the reason why Malta has failed to strike oil and gas unlike the positive results registered by its neighbours. It was shocking to read last year how seismic data retained by the government, which is so essential to attract prospective investors was found dumped and abandoned in a secluded garage... unsung and unheard. It is a pity that such vital evidence painstakingly collected over 60 years of drilling has been unceremoniously discarded and not fully utilized to enrich our data room.
Moving on, one recalls a promise made in last year's budget to set up a National Oil Company, which unfortunately has not been fulfilled. One hopes that a serious attempt is done in next budget as only a properly manned national oil directorate can turn the wheels in our favour. The man in the street has by now got so fed up reading about failed attempts that hope of a successful discovery has faded completely and melancholy set in while it is sour grapes to observe how Cyprus, Greece, Israel and offshore Egypt succeeded in their recent efforts to discover rich gas deposits in the eastern Mediterranean. Perhaps, taking courage from Joe Mizzi's announcement, we should make every effort and avoid letting past dismal performance break our resolve to join the list of successful oil / gas countries in the Mediterranean basin. The early bird catches the worm.
The writer is a partner in PKF, an audit and business advisory firm
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