Heritage Oil reiterates “significant” hydrocarbon potential in Maltese waters
by David Lindsay
Heritage Oil, currently exploring oil potential off the coast of Malta, said in its annual report this week that studies carried out so far point to “significant hydrocarbon reserves potential” in the areas it is exploring and that it is planning a high impact exploration well in the fourth quarter of the year.
The company also reiterated that the well would target a structure with a potential of 500 million barrels of oil equivalent. Earlier this year, the company had given the exploratory well a 20 to 25 per cent chance of success, but it made no mention of the expected success rate in this week’s report.
Heritage Oil said it plans to extend its operations in Malta, with the acquisition of an additional 1,000 kilometres of seismic data, as well as with the drilling of an exploratory well later this year.
So far, the company said it has “already identified a number of large targets from over 3,500 kilometres of seismic data acquired when the company was awarded the Malta licences at the end of 2007”.
Heritage Oil signed an agreement for the exploration and production of oil and offshore gas in two areas (Areas 2 and 7) off Malta, totalling nearly 18,000 square kilometres, in December 2007. Area 2 and Area 7 are located respectively some 80 kilometres and 140 kilometres off the southeast coast in water ranging in depth from 200 to 400 metres.
The contract’s term is divided into two: the first six years are allocated to exploration and the rest to development and production, should oil and/or gas be discovered in commercial quantities.
If petroleum is discovered, Heritage Oil would retain part of the petroleum produced to recover its costs while the remaining part of production would be shared on a pre-agreed scale between the company and the government.
Should oil be discovered, the company will, after appraising the discovery, prepare a development plan for the government’s approval. Such a plan would consist of technical and engineering plans for development, a detailed economic, social and environmental impact study and a study on the government’s needs to develop and improve its capacity to monitor, supervise and carry out development and production-related activities. The two areas under Heritage Oil’s domain are close to a number of producing fields offshore Libya and Tunisia, and the company says the licences it holds relate to areas that are under-explored, with only one well having been drilled in Area 2 – the Medina Bank-1 well – in 1980. The well was drilled to a depth of 1,225 metres, the company says, but failed to reach the target horizons, estimated at between 1,500 and 4,500 metres. The well did, however, encounter signs of natural gas in porous, fractured carbonates.
The company’s current seismic interpretation is based on an extensive data set of almost 3,500 kilometres of 2D seismic data acquired in 2000.
The company notes that this data indicates the presence of a variety of potential prospects, specifying that primary targets are miocene, lower eocene and cretaceous mounded carbonates that are recognised as major hydrocarbon-producing zones in the central part of the Mediterranean.
In addition, the company has recognised the presence of a north-south trending shelf margin on the eastern margin of the blocks and that a number of attractive reef prospects have been mapped.