MaltaToday | 02 July 2008 | Libya contests oil company’s licence area

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NEWS | Wednesday, 02 July 2008

Libya contests oil company’s licence area

Matthew Vella

Malta’s new oil exploration licence to Heritage Oil Corporation has encountered protest from Libya’s national oil corporation, despite ongoing talks between the two countries over joint exploration.
Although last May foreign minister Tonio Borg announced a “long-awaited breakthrough” in the pipeline on the Malta-Libya dispute, Heritage Oil was last February informed by the National Oil Corporation of Libya that its licence area lies within the Libyan continental shelf.
The Canadian oil company said in its annual report that it received a letter from the chairman of the National Oil Corporation of Libya on 28 February, stating that its licence area lies within the Libyan continental shelf, and a portion of this area has already been licensed to Sirte Oil Company.
The letter also demanded that Heritage Oil refrain from any activities in the area and asserted the Libyan government’s right to invoke Libyan and international law to protect its rights in the area.
The directors of Heritage Oil wrote in the annual report that that the Libyan government’s claims are unfounded.
Heritage Oil was awarded a licence by the Maltese government in December 2007 for exploration of its south-eastern blocks.
The areas have had only one well drilled back in 1980, which failed to reach target depths of 1,500 to 4,500 metres.
Malta has been embroiled in a legal dispute with Libya over the demarcation of the continental shelf and the median line separating the two countries.
Today oil experts believe that short of an agreement that delineates the international border in the disputed area once and for all, the only feasible way out is to enter into a joint exploration effort with the Libyans.
But the border dispute with Libya has dragged on since the early eighties and surfaces each time Malta attempts to engage in exploration efforts in the area.
Pancontinental Oil, the Australian company which also operates a licence granted to it by the Maltese government, said in 2006 that two particular areas it was surveying held world class oil prospects.
But further studies in the zones had to be postponed by six months on the request of the Maltese government until the dispute with Libya was resolved.
Its latest quarterly report for 2008 states that no exploration work has been carried out since then, since the Maltese government is still discussing joint boundaries with Tunisia and Libya.
The company says the main prospects it has identified have “very significant potential and are in the same geological province as the very large oil and gas fields offshore Libya and Tunisia.”

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