oil exploration abandoned

Oil exploration abandoned
Jesmond Bonello

Oil exploration scheduled to take place off the southeast coast of Malta has been abandoned by the Australian company licensed to carry out the drilling.

Hardman Resources NL announced it has decided to abandon the ambitious project after it failed to attract potential investors to form a joint venture. The company said it was surrendering its licence.

The government had staged an official ceremony to announce the granting of the licence four years ago. But now that the Australian firm has decided to abandon the project, the government has failed to announce the decision.

Hardman Resources held an 87.6 per cent interest in blocks 4 and 5 offshore Malta. The company had been seeking a partner to partially fund the drilling of an offshore well to enable continuation in the licence beyond the well commitment date of October 5.

A company report said that "although large prospects had been identified in the licence area, offshore Malta is still regarded as a relatively high risk carbonate play and the well was expected to cost about US$8 million. Reluctantly, in the absence of a suitable arrangement the joint venture agreed to surrender the licence".

The licence area, covering blocks 4 and 5, is located 60 kilometres east of Malta and southeast of several oilfields off Sicily.

The largest of these fields, Vega, is 65 kilometres away from blocks 4 and 5. It was discovered in 1981 and is reported to contain 300 million barrels of recoverable oil.

When the licence had been allocated to Hardman, Godwin Debono, director of the oil exploration division, had said that although new data had only just become available and more time was needed to assess it properly, it looked encouraging.

Nonetheless, Dr Debono had said that one had to await the response of the oil industry before drawing any conclusions.