My car driver, Heathcliff, points to a large oil rig docked in the
Valletta Harbour as he takes me to the airport. “It’s being repaired to
start drilling,” he says.
A day earlier, I noticed two rigs already offshore when I visited Blue Grotto on the southwest part of the island.
A native Maltese, named after the character in English
literature-classic Wuthering Heights, Heathcliff tells me that people in
Malta, a former part of the British Empire, are more interested in the
planned conversion of the local power station to run on natural gas than
the small country’s plans to drill for oil.
Malta currently relies on oil imports, mostly from Libya. They hope
natural gas will reduce Malta’s dependence on electricity produced from
oil, and will result in corresponding reductions in electricity costs.
Valletta-based GM International Services Limited Chairman John A.
Gauci-Maistre, a maritime major, tells me Malta is completely dependent
upon imported fuel oil which is combusted in mostly older low-efficiency
plant. This results in high marginal costs for power generation on the
islands.
“Having the power station run on gas is a cost saver,” he says. “On a
local level people may disagree. You know how it is in local politics
and Malta is a small island so we know each other. But I think all in
all the current government is determined to move on what the previous
government had built up,” Gauci-Maistre says.
There is a discussion about having liquefied natural gas (LNG)
storage in one of the harbours. “There is a whole a lot of talk going on
about the safety and whether it should be out at sea – that is until
the interconnector is available from Italy. But then again they are not
even sure if the interconnector is going to be adequate supply,” he
says.
Gauci-Maistre notes that the government seems to think that LNG will have the lowest cost and is moving in this direction.
Meanwhile, international oil and gas companies are once again becoming interested in exploring for oil in the Malta’s waters.
“Seismic surveys are going on offshore,” he says. “In the meantime
some deep exploration is going to start as well,” Gauci-Maistre says,
adding that drilling would comply with EU standards.
At the moment, Malta relies exclusively on imports for its energy needs, he says.
He recalls that companies have been searching for oil in Malta on and
off since the late 50s but have not found any hydrocarbons. However,
recent discoveries offshore Israel, along with exploration offshore
Cyprus and a licensing round offshore Lebanon highlight the
Mediterranean Sea’s oil and gas potential.
Malta is located not far from the oil-rich waters of Libya – which
holds Africa’s largest proven reserves of sweet oil. “Even the previous
government they had been searching but this time they’re all out,” he
says.
Gauci-Maistre says potential oil and gas reserves in the
Mediterranean are essential to help Europe reduce in reliance on
imports, especially from Russia. “I think they have no choice but to
look for it because that dependency is dangerous,” he says.
As we reach the Valletta International Airport, Heathcliff quips:
“All this may bring fuel prices down. And that’s a good thing”.