March 7 (Bloomberg) -- Mediterranean Oil & Gas Plc will begin drilling at the Hagar Qim 1 exploration oil well off Malta in the next few weeks, said the country’s infrastructure minister, Joseph Mizzi.
Results of the drilling at the site about 130 kilometers (81 miles) south of Malta are expected as soon as July, Mizzi told a conference in the capital Valletta today.
Tony Hayward, chief executive officer of Genel Energy Plc, said at the same conference that drilling will begin at Hagar Qim 1 around the end of March, and the first results are expected by mid-July. Genel holds a 75 percent stake in Mediterranean Oil & Gas’s license interests in Area 4 south of Malta, according to the company’s website.
Malta’s government is offering incentives to companies to drill in deep-water offshore areas.
Hayward said Europe’s energy policy is in disarray, with gas plants being closed in a number of countries and replaced by coal, which has become cheaper. With oil prices fairly stable, returns are at historic lows, meaning that energy companies are under pressure to reduce capital expenditure.
“It is very hard to attract capital, and investors need greater security and stability before they will make a long-term commitment, which oil and gas is,” Hayward said.
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