On 7 December 2012, the Government of Malta awarded three offshore blocks totaling 6,400sq km to Capricorn Malta, a subsidiary of Edinburgh-based Cairn Energy. Cairn CEO Simon Thomson, who succeeded Sir Bill Gammell as chief executive in July 2011, is looking to balance the company's portfolio of frontier exploration assets.
Capricorn's Malta license blocks Capricorn Malta will conduct a study, acquire additional data, and assess the exploration potential of the acreage under an Exploration Study Agreement. Resources Minister George Pullicino signed the contract on behalf of the Maltese Government. The offshore areas granted are Blocks 1, 2, and 3 of Area 3, located north of Malta. The term of the Exploration Study Agreement is 2 years and the principal financial obligations of Capricorn Malta are:
The work program consists mainly of the reprocessing of existing 2D seismic data, the acquisition and processing of a minimum of 1,500km of new, 2D seismic data and technical studies. This will include integrating and interpreting the existing, reprocessed, and newly acquired seismic data with well data and mapping key horizons over the area covered by the seismic data.
The agreement may also, at the option of Capricorn Malta, be extended for an additional 12 months if Capricorn Malta agrees to undertake a 3D seismic work program.
At any time during the term of the Exploration Study Agreement, Capricorn Malta has the option to notify Government if it chooses to enter into a Production Sharing Agreement (PSC) for any part of the acreage covered by the Exploration Study Agreement. The terms of this agreement will need to be negotiated at the time between Government and Capricorn Malta.
Technical meetings will be held between the Government and Capricorn Malta to review and discuss the interim results of the exploration study.
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