WATCHING THE WORLD MALTA BECKONS EXPLORATIONISTS

The Mediterranean island of Malta has for many years harbored hopes of offshore exploration.

Malta sits on a trend between the two largest producing fields in the Mediterranean: Sicily's Vega field and Libya's Bouri field, the largest offshore oil accumulation in the region.

And like any country apparently surrounded by revenue generating oil fields, there has long been an assumption in Malta that once drilling starts, the first discovery will be just around the corner.

EXPLORATION WAXES AND WANES

Unfortunately for the Maltese, exploration has never really had a chance to gather momentum.

The award of offshore licenses in the 1970s stimulated interest from the international exploration community and set off the first stages of seismic surveys and wildcat drilling.

But a territorial dispute with Libya south of the Maltese islands rapidly deteriorated into threats of naval action and hastened an end to interest in exploration by foreign oil companies.

Permits remained in force in the area between Malta and Italy, but interest there also slowly evaporated. The last of the licensees, Agip SpA, Milan, relinquished its remaining acreage in 1985.

The new Maltese government is anxious to rekindle outside interest in exploration. It has the advantage of agreed offshore boundaries to the north with Italy and an end to the dispute with Libya in the south on the basis of a judgment by the International Court of Justice.

This has opened these two areas. But as the government points out, there are still a further 840 miles of undefined continental shelf boundaries that need to be negotiated. That could raise Malta's total maritime acreage to 72,000 sq miles.

Exploration has started north of Malta. More than 18 months ago this area was offered to foreign companies under a new production sharing contract. In July, Blocks 2 and 3 were awarded to a combine of Amoco and BHP Petroleum.

With Amoco operating, work has started on magnetic and seismic surveys, to be followed by the drilling of the first of two wells on a 4,150 sq km spread. The acreage lies north and northeast of Malta. There is an option for a third well.

MORE ACREAGE DUE

Meanwhile, the government is still negotiating with other companies for blocks in the northern area.

The process of opening the acreage south of Malta also has started. Industry sources say foreign companies are likely to be more interested in the areas adjoining the border with Libyan waters than in the northern tracts.

In the fall of 1989, the Maltese government signed an agreement with Japan National Oil Corp. for a geological and geophysical survey of the area. The survey was conducted at the end of last year, and interpretation is almost finished.

The government plans to release the data in first quarter 1991, when acreage will be offered. Industry response is expected to be good. Maltese authorities report a number of major oil companies have expressed interest in the area.