Malta’s Offshore Solution – Energy Stability or Last Ditch Effort?

Driven by a precarious domestic energy environment and the opportunity to address claims disputes, Malta has renewed its focus on offshore efforts this year, but are finding that production success may be more difficult than first expected. Areas to the south and to the West have been the subject of disagreements over legitimate claims for several decades, pitting Maltese leaders against those from Tunisia and Libya, who went so far as to send a gunboat to stop exploration in the Medina Bank in 1981. The disagreement lingered in trials held by the International Court of Justice and attempted talks between the two countries but little progress was achieved in the years since.

Sensing an opening as both Libya and Italy faced political circumstances that removed any focus from offshore claims, Malta revitalized efforts to exploit offshore reserves, partnering with firms such as Mediterranean Oil and Gas to move efforts forward. In August of this year, Malta announced a licensing round to run through December for areas in the Ionian Sea previously claimed by Italy and previously protested by Libya. However, as Libya comes back online and a new obstacle in the form of revised European Union regulations on offshore drilling come about, success has become more elusive.

According to Platts, last week saw Malta’s EU minister join representatives from the Netherlands and the UK to voice their concerns about the impact of new regulations on offshore efforts on national sovereignty and the ability for the countries to pursue existing projects. Malta’s exploration push is anchored in the country’s efforts to reduce oil and gas exports and stabilize a domestic energy environment that has seen the price of products and environmental risks spike in recent years. These efforts have been rewarded in some ways, such as the EU approval of funds for a natural gas pipeline linking the island nation to the continent, but a lack of sufficient funding and available resources remain obstacles to energy sufficiency.

In what appears to be an effort to partner with a revitalized Libya instead of challenging them on offshore claims, Prime Minister Lawrence Gonzi visited Tripoli this week to reiterate support for the new government and economic partnerships. Malta was one of the earliest states to formally recognize the country’s transitional government as legitimate.

Photo: Marine World. Text: Originally Published in EurOil, All Rights Reserved.

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