Do a vox pop in the streets of Valletta and ask people about the prospects for oil exploration here and the answer will surely be that it is a foregone conclusion that no oil exists on our continental shelf. The majority will refer to the many attempts in the past 50 years that have failed to locate oil in any commercial quantities, while some may recall Mintoff’s chagrin when, as prime minister in the 1970s, he faced Libyan gunboats to stop us from drilling on the disputed Medina Bank. So, yes, the prospect of oil is now a taboo subject, best left for tricksters or spin doctors who bring it up prior to each election.
Just recall the national frustration caused by a dry well nicknamed ‘Madonna taz Zejt’ in Gozo, about which the Nationalists had based so much hope to the party faithful, only for that hope to be mercilessly dashed. A high level of cynicism clouds the subject but, according to geologist Peter Gatt, the issue needs to be scientifically assessed in the light of new facts and improved drilling technology. Quoted in another section of the media, Dr Gatt said: “There is no reason to believe that Malta doesn’t have its own oil reserves. In fact, the indications I have seen suggest the opposite.” Perhaps this is due to the recent study of 3D Seismic reports which yielded what he describes as “definite hydro-carbon indicators”, mostly in the form of gas emissions.
“In the rest of the world, such indicators would be interpreted as signalling a high probability of an underlying oil or gas field,” he said. “Strangely, however, in Malta the same indicators were interpreted in the opposite way, ie as an explanation for Malta’s failure to find oil.”
So where do we go from here. With an approaching election, the subject will definitely not impress our politicians, but one would hope that a fresh impetus will be given to it in the 2013 budget. So far, there has been no mention of the dreaded issue, for the reasons given earlier. One can understand the inertia on part of the Government not to be seen broaching the subject. Many experts in the international press would argue that with the oil price hitting its highest ($114 a barrel), there should be a queue of investors at Malta Resources Authority (MRA) wanting to pursue the trail in the search of black gold.
Dr Gatt also asks why Malta is not carrying out enough research of its own. Certainly, the oil exploration division is a watered down affair much like a Cinderella of the bunch of departments. At this juncture it is important to note that geologists are the experts responsible for finding oil. It is their job to find the right conditions for an oil trap – the right source rock, reservoir rock and entrapment.
For many years, geologists interpreted surface features, surface rock and soil types and analysed small core samples obtained by shallow drilling. Modern oil geologists also examine surface rocks and terrain, with the additional help of satellite images. However, they also use a variety of other methods to find oil as they use sensitive gravity meters to measure tiny changes in the Earth’s gravitational field that could indicate flowing oil, as well as sensitive magnetometers to monitor changes in the magnetic field caused by flowing oil. So why has the University not be asked to establish a faculty for training geologists?
Perhaps the decision to focus on ICT services has resulted in us concentrating on Smart City as an ICT dream factory employing thousands, and ignoring this important profession. It may also be a question of scarce resources, but then cynics will ask why we squandered over €2 billion to salvage white elephants such as the drydocks and a burgeoning public service payroll (studies indicate that thousands are under-employed). Still for the man in the street, the saga of oil drilling is too complex to comprehend and most would prefer that the government puts its money where its mouth is – ie supporting public expenditure and reducing the deficit.
Economists may disagree and remind us that the tax-and-spend attitude of the past 20 years has given us a false sense of stability and job security which cannot be sustained. What happens when the €1 billion in EU funds dries up next year? Why is there no provision in our budget to secure prepayment of the €6 billion national debt? It is no consolation that the Governor of the Central Bank (himself an ex–minister of Economic Affairs) warns us that we are living beyond our means.
So let us discuss the option of oil prospecting which, if successful, could prove to be a panacea in the next 20 years. The finding of oil is now a common occurrence and it is being found in larger quantities in many places around the world. Yet not all oil is accessible from land or in shallow waters. Oil deposits can be buried deep under the sea bed and, of course, technology is available for drilling not only vertically but in an Omni direction. This has resulted in many success stories.
The risks of deep sea drilling are high (remember the BP Mexico environmental disaster) but proper attention can be given to ensure higher safety levels for both the workers and the surrounding environment. The latest technology makes use of sophisticated sonic equipment to test the sea bed for traces of rock oil and reservoirs.
To explain how seismic surveys work: a shock wave is created by three alternatives methods, a compressed-air gun, a thumper-truck and the use of explosives. The shock waves travel beneath the surface of the Earth and are reflected back by the various rock layers. The reflections travel at different speeds depending upon the type or density of rock layers through which they must pass. Sensitive microphones or vibration detectors detect the reflections of the shock waves – hydrophones over water. The results then go to seismologists, who are best suited to interpreting the data, and in our case the latest study on offshore Area 4, which comprises four contiguous license blocks in the southern Maltese offshore area, are encouraging. The study covers an interpretation of 390 sq miles long-offset 3D which was concluded late last year. The good news is that Area 4 is not subject to any contestation by neighbouring countries. The acreage contains mature prospects analogous to proven plays in the Libyan Sirte basin, and field analogues in Tunisia.
In our case an offshore drilling unit is used to drill down such deep wells into the sea floor using safety measures which will include the careful placing of a blowout preventer .This consists of pair of hydraulically-powered clamps that can close off the pipe leading up to the rig in the case of a blowout. In practice, the process involves engineers monitoring that the drill bit that cuts into the rock as more pipe is added to reach very deep holes. To add stability to the well, the engineers use metal casings to help prevent it collapsing in on itself. What usually happens is that casings get narrower as the well gets deeper, so obviously smaller drill bits are progressively used as the well’s depth increases. At the point where oil is hit, the task of sealing the well is rather dangerous and is taken very seriously by engineers who use a pair of plugs to seal off the well bore. At this stage, the well is ready for a production rig to take over.
In previous years, when neither the Gaddafi (Libya) nor the Ben Ali (Tunisia) regimes were accommodating, we tried to drill in offshore areas but our efforts were thwarted by some countries which, nevertheless, have never agreed to joint exploration.
The positive aspect is that with recent changes – starting with the Jasmine Revolution and now with a new democratic constitution in both countries – it is to be hoped that a new era of oil prospecting will no longer be just a pipe dream with which our politicians have previously tempted us on the eve of each election. Is there a reality check in view? It appears so – as each local political party is quietly contemplating that the issue will have a suitable niche in its political manifesto. This way, a more relaxed view is taken by the electorate and the subject will not be swept away by the unrealistic mirages of a feel-good factor.
With our feet on the ground, we have to face our destiny with courage and determination. Haġar Qim is the name of a sacred temple of 5,000 years ago. Our ancestors would be pleased to learn that we are seriously taking the right steps to reap our merited bonanza stored deep under the sea.
George M. Mangion
[email protected]
The writer is a partner in audit and business advisory firm PKF