Malta proposes joint exploration after Italy protests at new exploration blocks

Speaking from Luxembourg yesterday, Borg said that such protests are normal and history shows that Malta protested when Italy issued its exploration blocks, and Italy protests when Malta issues its exploration blocks.

“Notwithstanding these protests, no effective drilling is taking place on any of the contested areas by Malta and Italy,” the minister argued, adding that Malta is working on a series of proposals for discussion, and oil exploration matters are among them.

According to Borg, Malta is proposing a joint-exploration agreement with Italy, while other technical bilateral issues are also being proposed.

“These are normal issues between two neighbouring countries. Our relations are excellent, but obviously both sides take their national interest at heart, so if one looks at reality, we both protest over the same thing, but nobody is effectively drilling in the contested areas as long as we still have disagreements,” Borg said.

Borg was reacting to a Financial Times report published yesterday that revealed how Italy was set to delineate exclusive economic zones southeast of Sicily after issuing diplomatic demarche in protest against Malta’s tenders for oil exploration covering area claimed by Italy.

The Italian government said it is preparing legislation to delineate Italy’s exclusive economic zone over an area of the Ionian Sea, southeast of Sicily, and put out tenders for exploration blocks to international oil and gas companies.

The Financial Times reported that Italy recently issued a diplomatic “demarche” through its ambassador to Valletta in protest against Malta’s publication in August of a tender for oil exploration covering areas of the continental shelf in the Ionian Sea claimed by Italy.

Malta is also in dispute with Libya over offshore areas further to the south.

“Italy said Malta’s move violated the ‘spirit and letter’ of the 1982 UN convention on the law of the sea which committed all states to reach ‘equitable solutions’ in delimiting their zones,” the FT reported.

In January 2011, the government of Malta issued a formal letter of protest to Italy over concessions granted for oil exploration in part of the continental shelf around the islands of Pantelleria, Linosa and Lampedusa.

The reason for the protest is that Malta recognises part of the continental shelf as its own national territory, Foreign Minister Tonio Borg said in reply to parliamentary question a Labour whip Joe Mizzi.

However, the government of Malta appears to be adopting an entirely different approach with regards to an almost identical dispute with Libya, over a reportedly oil-rich region on the continental shelf separating Europe from Africa.

In March 2008, Libya issued a formal letter warning Heritage Oil Company Ltd – which had been contracted by Malta three months earlier to undertake oil exploration in the region – to desist from any activity in an area that the Great Libyan Arab Socialist Jamahiriya considered part of its territory.

Malta also claims part of the same continental shelf as its own – in particular, an 8,000 sq metre stretch designated as ‘Area 7’ – but the Foreign Ministry stopped short of formally protesting when the Libyan government issued a concession to Sirte Oil Company Ltd to carry out oil exploration in the area.

A concession map published by Libya’s National Oil Corporation in 2007 clearly indicates that the area ceded to Sirte Oil Co. under this agreement covers the same territory for which Malta had granted a concession to Heritage Oil.

But while Heritage Oil has yet to start its operations on account of threats of legal action by Libya, Sirte’s operations are already under way.

The FT reports that Italy’s haste to develop offshore fields follows an escalating dispute between Israel and Lebanon over the location of their maritime border, with potentially vast gasfields at stake. Turkey and Cyprus are also in dispute over offshore gas exploration.