Worldwide Energy News - Article
This article is extracted from International Oil Letter, Vol 23 issue 51, published 24 December 2007.
To access the most up-to-date new articles, subscribe now or register for a free trial of Energy News On Demand or the International Oil Letter.
Heritage Oil awarded acreage off Malta
The government of Malta has awarded acreage formerly held by TGS-Nopec to Calgary-based Heritage Oil. The 9,190 sq km Area 2 and 8,778 sq km Area 7 are located in 200-400m of water. About 3,500km of data acquired since 2000 has reportedly identified a variety of prospects in the Lower Eocene and Cretaceous carbonates. Heritage Oil will serve as operator holding a 100% interest and open an office in Malta. The 30-year contract includes a signature bonus of US$ 2 million to be paid to the government, expenditure of at least US$ 22 million in the first three years of the contract, annual rentals on a rising scale payable to the government, starting from US$ 240,000, and annual scholarship and training contributions of US$ 100,000. The initial three-year work program includes a 1,000km 2D seismic survey and the drilling of at least one exploration well. A three-year extension is optional. Should oil or gas be discovered, Heritage will retain part of production to recover costs while the remainder will be shared on a pre-agreed scale between the company and the government.
Areas 2 and 7 had been held by TGS-Nopec under an Exploration Study Agreement (ESA), which was repeatedly renewed until 2007. There was a border dispute with Libya, particularly with the western of the acreage, and it is believed the ESA area may have been reduced according to an earlier ruling by the International Court.