Malta’s continental shelf is the largest and most valuable asset of this country. Its area is more than three times the size of Sicily and includes hydrocarbon and other mineral resources worth several billion euro. The prospects of hydrocarbon exploration in the Maltese shelf are good: An island with a stable government poised on the threshold of the Eastern Mediterranean (which has become the world’s newest oil and gas frontier exploration area) and surrounded with three productive petroleum provinces.
But the past three decades have defied all expectations. Malta remains a lacuna on the oil exploration map of the Mediterranean and the density of Italian offshore wells per square kilometre is 20 times greater than that of Malta. Not a single exploratory well was drilled over the past decade and promising offshore acreage licensed since end 2007 to Heritage Oil along Malta’s eastern continental shelf (Areas 2 and 7) remains undrilled.
Well drilling activity was started in the 1970s by Prime Minister Mintoff. But after just one and a half decades, the Maltese oil exploration programme was overcome by inertia. Malta’s oil exploration programme failed to attract major oil companies that can deliver success and many oil exploration licences remained undrilled.
The statistics of wells under Maltese licence are dismal and sometimes bizarre. Only 12 deep wells were drilled by foreign oil companies over the past 60 years, although the Madonna taz-Zejt well drilled in 1998 in Kercem, Gozo, is distinct because it was paid from public funds. Over the same period of time, Italy drilled more than 6000 wells, although none of these reached the extraordinary depth of eight kilometres of the Kercem well, because it is impossible to find oil at that depth. With such poor statistics in oil exploration, it is not surprising that Malta remains the only EU country dependent entirely on imported carbon fuels (oil and gas) for its energy needs.
A high risk exploration area
Oil exploration is a very risky business that has to contend with high drilling costs, potential accidents and incomplete knowledge of sub-surface geology. The latter problem is heightened by the lack of geological research on the Maltese continental shelf which makes Malta a high risk oil exploration area to foreign oil companies. Malta is unique in Europe in not having a national geological service that can promote national interest on matters associated with natural resources. This has weakened the government’s bargaining power with foreign oil companies so that some oil companies have had the upper hand over the past two decades.
Malta’s predicament is aggravated by excessive official secrecy on every aspect of oil exploration data, which is unparalleled in the rest of Europe. Secrecy deters geological research which increases risk that compels oil companies to invest elsewhere, especially in neighbouring countries. Despite changes in administration, government policy has remained unchanged over the past 25 years and, unintentionally or intentionally, continues to undermine Malta’s oil exploration programme.
Malta’s continental shelf
In 1985, the International Court of Justice (ICJ) established about 100 km of internationally recognised maritime boundary with Libya, but the remaining boundary is disputed by Italy, Tunisia and Libya (see map). Malta holds the unenviable records of having the longest disputed maritime boundary in the Mediterranean and over half of its continental shelf claimed by other countries. Tunisian encroachment resulted in two wells drilled on Maltese continental shelf.
Apologists for Malta’s failed oil exploration programme blame boundary disputes. This pretext is contradicted by the successful oil and gas exploration programmes of Cyprus and Israel, two small Mediterranean countries that, like Malta, had to contend with boundary disputes, but also hostile larger neighbours and invasions. Israel drilled over 200 oil and gas wells in the past 60 years, but it was the determination of Israeli geologist Yossi Langotsky that culminated in the discovery of three giant offshore gas fields a few years ago. Meanwhile, Cyprus promotes its hydrocarbon potential through the Cyprus Geological Survey and has attracted a long list of oil companies bidding for licences. Both countries are expected to become energy exporters in a few years’ time.
Beset with internal squabbles, Malta’s neighbours continue to raise their flag on more of its continental shelf area. Italy’s largest continental shelf grab happened while Maltese politicians were absorbed in the run-up to the March 2013 general election. In December 2012, Corrado Passera, Italian minister for Economic Development, issued an official decree that extended the Italian continental shelf over a vast area of Malta’s eastern shelf which includes potential oil reservoirs and known gas hydrates along the seabed.
Joint exploration of disputed areas is the solution proposed by the Maltese government, although astutely rebuffed by neighbouring governments. Malta has not exhausted all the legal and practical channels available to secure sovereignty over its continental shelf. Such lethargy fuels allegations on the political class and their inability to promote the national interest.
A new oil well
Mediterranean Oil & Gas (MOG) and its partner Genel Energy have announced that in the next few weeks they will drill an exploratory well named Hagar Qim in Area 4, about 130 km south of the island. A potential Eocene oil reservoir is being targeted.
The area to be drilled had its first detailed 3D seismic survey in 1993. Despite a second 3D seismic survey in 2011, the probability of an oil find according to Genel Energy is 20%. The subsea geology is the fundamental factor that determines success. The absence of an oil well in Area 4 that can confirm the hypothetical stratigraphy proposed by oil companies is a setback that increases risks.
Even more remarkable is that Hagar Qim well will be drilled in the middle of a structural low called the Melita Graben. The nearest Libyan offshore well named East Hanea drilled in 1992 south of the border is located just outside the Melita Graben, as would be expected in the quest for oil trapped in structural highs. Nevertheless, the stratigraphy that will be discovered by Hagar Qim well will be invaluable to Libya’s offshore Sirt Basin exploration efforts which have been thwarted by the civil war that halted well drilling. It may also be relevant to the development of the undrilled large Libyan offshore concession to BP further south. Coincidentally, Genel’s CEO was BP’s CEO until he resigned following BP’s Deepwater Horizon rig explosion and massive oil spill in the Gulf of Mexico.
But there is more than meets the eye in the Melita Graben. There are two features seen in seismic that can be confirmed with some confidence: firstly, there are mound-like sedimentary accumulations within the graben. MOG believe that these mounds are Lower Eocene and similar to nummulite-rich sediments in Tunisia where they make effective oil reservoirs. However, the sediments and nature of these mounds remains debatable.
Secondly, these mounds have their top sediments partly eroded. This feature can be linked to Early Eocene fall in sea level, an event which my research has traced throughout Malta’s continental shelf where evidence for the deposition of gypsum salts is widespread. Nevertheless, MOG prefers to consider the rock that seals the presumed oil in the reservoir rock as being the Souar Formation, a shale rock. This is another speculative line of reasoning based on what is found in Tunisia, which may not necessarily apply to Malta.
Ultimately, the stratigraphic model being proposed by MOG and Genel Energy will be verified or debunked during drilling. Meanwhile, more enticing hydrocarbon leads elsewhere in Malta’s continental shelf remain undrilled and their hydrocarbon potential underexplored.
Dr Gatt is a geologist and researcher on Malta’s continental shelf