Medserv plc has continued to strengthen its expansion programme, despite the difficult market conditions that have continued to prevail due to security concerns in Libya.

“Significant progress has been registered in Libya regarding the political situation after the successful elections of late, although the security situation is still a concern,” said plc chairman Anthony Diacono “Libya has concentrated on resumption of production of existing facilities and oil and gas output has reached pre-war levels. However the return of International Oil Companies (IOC) to resume exploration is taking longer than expected, due to the security concerns. IOCs are now returning to Libya but with smaller budgets and fewer staff. It is obvious that they are carrying out preparatory work whilst awaiting developments.”

In the company announcement made today, the financial results shown for the first two quarters of 2012 reflect the disappointing market conditions to date. However business is expected to pick up in the final two quarters 2012.

“It is anticipated that the offshore industry will take off before the onshore activity as security is not a threat for offshore,” says Mr Diacono. “Major oil company BP have lifted the force majeure and opened the way for exploration to commence in 2013. This could be the catalyst to encourage IOCs to return to Libya and resume exploration. Medserv is well placed to participate in this activity from its base in both Malta and Libya.”

Medserv reports an optimistic outlook going forward, to the extent that it has made substantial investment in facilities and equipment to meet the increase in demand starting 2013. The company has now also finalised and signed the lease for the land for a new base in Limassol, Cyprus to service the Eastern Mediterranean.

Although the Misurata base is now open, it has not yet seen any new business from oil companies renewing operations. However the company reports that existing fee income at the Misurata base is sufficient to support day to day expenditure.

Whilst Libya was recovering from the war the authorities and oil companies concentrated on restoring existing oilfields onshore Libya to full production. During this time the Group has been preparing for the commencement of a number of large offshore Libya projects which have been in the planning stages for many years and which are planned to shortly enter the construction phase. Now that Libyan oil production has largely recovered to pre-war levels, increasing attention is being paid to these projects as the country strives to increase its production of fossil fuels to meet demand. The Medserv Malta base is receiving shipments of material in preparation for commencement of these operations. Repairs to subsea structures and maintenance to platforms are also being carried out and in this regard Medserv Malta has secured a substantial maintenance contract to be executed this year.