Oil drillers obtain court injunction against government

Malta oil drillers Pancontinental Oil & Gas and Sun Resources have been granted an interim injunction preventing the Maltese government from granting petroleum rights over a disputed offshore area until a hearing later this month, according to a company statement.

Australian firm Pancontinental claims it had been in discussions with the government over whether or not its existing exploration study agreement (ESA) had expired, as alleged by the government, or if its obligations under the ESA had been suspended pending a dispute with Libya,

This is a border dispute between Libya and Malta which Pancontinental said was still preventing it from carrying out a seismic programme. The government has four days to reply to the injunction.

Pancontintental's ESA covers Area 5, and Block 3 of Area 4 which lie within the disputed offshore area off Malta.

In the meantime, the Resources Ministry has been processing applications for a call for tender for oil production sharing contracts. The ministry said it was involved in a promotion campaign through the resources authority in London and Houston, and oil company representatives had visited Malta to see what exploration potential existed here. 

Pancontinental says it has been attempting to renegotiate the ESA, because government call for bids for the grant of petroleum rights also includes the area that was the subject of the ESA.

It says the government has refused to meet the joint venture partners which led it to seek the injunction to prevent the government from proceeding with the bidding regime over the area covered by the ESA until the dispute was resolved.

"Pancontinental and Sun remain steadfastly resolved to retain their rights under the ESA and to recommence oil and gas exploration for the benefit of both Malta and their shareholders as soon as possible," Pancontinental said in a statement to the Australian Securities Exchange.

The Court of Malta has granted the joint venture an interim injunction until a hearing on 9 December in which the duo will seek a full injunction to prevent the government from accepting bids for petroleum rights over the disputed area.