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9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 T he Maltese government has entered into a two-year oil and gas explora- tion study agreement with Albion Energy for two offshore areas to the east. e agreement does not mean the company will be drilling wells to test for oil and gas anytime soon. Albion will be carrying out geological and geophysical studies on existing data for Area 2 and Area 7. e development is positive news in the sense that government appears to be willing to explore and hopefully exploit Malta's offshore resources. And carrying out studies is always going to be the first step before any company can commit re- sources and energy to active exploration. But the decision to focus on Area 2 and Area 7 does raise serious question marks. e same areas had been awarded on concession to Heritage Oil back in 2007 to carry out the very same studies Albion will be conducting. e then-owner of Heritage Oil is now the owner of Albion, and so has particular knowledge of the areas. Heritage Oil had gone as far as identi- fying an interesting prospect, which it labelled Caravaggio, for possible drilling. But despite being drill-ready the compa- ny was ordered by the Maltese govern- ment in 2015 to halt operations because Italy had competing claims to the area. e dispute has not been resolved de- spite talks with Italy. e same areas had also been contested by Libya with the infamous gunboat incident of the 1980s forever a reminder of Malta's weakness in defending its economic interests. ese competing claims by neighbour- ing countries have for years dogged Mal- ta's oil exploration hopes on its eastern flank, which many believe could hold interesting hydrocarbon prospects. Unless these disputes are resolved amicably, Malta will be wasting its time granting licences in these two particular areas. is is why the latest decision to return to Area 2 and Area 7 may not be a judicious one. Undoubtedly, it makes sense for Malta to intensify its exploration activity, espe- cially where the prospects indicate the presence of natural gas. However, this requires a multi-pronged strategy. For starters, Malta must embark on a diplomatic offensive to resolve outstand- ing disputes with Italy, Tunisia and Libya over hydrocarbon exploration in areas Malta claims for itself. e prospect of joint exploration and exploitation should not be ruled out a priori and may offer a plausible solution to some of the disputes. Secondly, Malta must up its game and drill more wells. It is not enough to say that all efforts so far have given negative results. at is to be expected. But the truth is not enough effort to actually drill wells has been made since the 1950s when the first well was drilled. Intensifying exploration efforts in those areas where there are no disputes is a must. is can be achieved through partnerships with private companies but government should also consider setting up a State-owned exploration company. Although Malta must continue to champion alternative energy sources in an effort to combat climate change, it is naïve to believe that the transition can be done overnight. Natural gas, a less polluting fuel, is likely to be an important transition fuel in the years to come. Furthermore, the Ukraine invasion has shown the impor- tance of Europe cutting its dependency on imports of strategic products. To have energy production based solely on renewable sources will require more research and development into battery technology to ensure security of supply by removing the problem of intermitten- cy. Until this happens, fossil fuels like nat- ural gas will continue playing an impor- tant, even if a diminishing role. Within this context, Malta must try to exploit its offshore resources to the full- est, which is why intensifying exploration efforts should be a government priority over the coming few years. Intensifying gas exploration efforts is important 26.1.2023

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