Updated | Genel expects first results on oil drilling by July - Hayward

Genel Energy CEO Tony Hayward revealed that the first results on oil drilling in Malta are expected by mid-July as the company is expected to start drilling around the end of March.

Genel Energy is conducting oil exploration in Malta's Area 4. In previous interviews, Hayward said the area's geology presented a high-impact prospect to the company with the potential for field sizes of at least 250 bbl and he was confident in Malta's geology and looks forward to drilling here.

Addressing the Economist's roundtable, Hayward said major trends were shaping the oil and gas industry and over the past decade, the industry underwent a revolution. He said that today, the oil market was well-balanced almost meeting the three million barrels lost in the political upheaval over the last three years.

"In contrast, the gas markets are undergoing an enormous transition: the US has been sitting on hundred years of cheap gas, tracing a massive industrial advantage. Exports from the US will begin to grow and likely to become the key price setter of the global market."

Hayward said coal was far cheaper than gas and subsidies for renewable energy have further reduced the demand for gas. In Germany, coal-fired power plants have expanded.

He pointed out the diversity of supply considerations will allow sources of gas to expand and the recent events in Russia may expedite the process.

On his part, infrastructure minister Joe Mizzi said the government will leave no stone unturned in its endeavour to exploit whichever resources become available to fund its social and economic programmes.

The government, a ministry official added, was in the process of amending the Continental Shelf Act enacted in 1966.

Since 1971, seven wells have been drilled, two of which were suspended.

"It is possible that a good commercial discovery of petroleum could very well be a leading factor that would shape the future of the Maltese population. For this reason, on assuming office last March, I immediately gave this sector the importance it deserves," Mizzi said.

Referring to overlapping maritime claims of neighbouring states, Mizzi said friendly relations will play a major part in the attempt to resolve these conflicts by seeking a solution through a joint activity exercise.

"We have no doubt that the sedimentary basins offshore Malta possess good, drillable structures analogous with existing producing fields in the Central Mediterranean. In these geographical structures, there is very good probability of petroleum in commercial quantities."

Major players like Shell, ENI, Amoco and Texaco have drilled several wells in the past but no commercial discovery has yet been made.

Cairn Energy and Mediterranean Oil and Gas will very soon commence a seismic survey to the north of Malta with the intention of identifying new drillable prospects that may have been overlooked in the past.

Depending on the results of the seismic studies, the companies may enter into a production sharing contract with government for the drilling of an offshore well.

The minister said a Government Agency will be set up to spearhead the government's efforts in the sector.

"Besides other functions related to oil exploration, the Agency will also aim to promote the oil and gas service sector and to increase training and education in this sector."

With Malta strategically located at the heart of the Mediterranean, surrounded by proven hydrocarbon systems with producing oil and gas fields in offshore Sicily, Libya and Tunisia, Mizzi said this made Malta's acreage an attractive one for petroleum exploration.