Mining

Malawi Govt. seeks investors for vacant oil exploration blocks

August 9, 2021
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86 Comments

By Wahard Betha

The Malawi Government is scouting for investors to acquire licences for all six vacant oil and gas exploration blocks in the country’s Great Rift System, which is a geological zone with potential for the discovery of hydrocarbons.

The development follows recent relinquishment of hydrocarbon search licenses by UAE firms Hamra Oil Holdings and Rakgas LLC.

“Currently, all petroleum blocks are vacant and the good news is that all these six blocks are now on advertisement looking for new applicants,” PRO for the Ministry of Mining Sangwani Phiri told Mining and Trade Review.

However, there were concerns that the existing blocks are too big with experts calling for re-demarcation.

Responding to the suggestion, Phiri said Government is also taking into consideration the demarcation of the big blocks and will ensure that it is done before new investors acquire the tenements.

He said the demarcation process will be conducted in tandem with provisions of the new Upstream Petroleum Policy and revised Petroleum (Exploration and Production) Act 1983. Government is currently reviewing both instruments.

Malawi’s Petroleum Law is considered outdated because it was enacted during the one party era hence gave absolute ownership of petroleum resources to the Life President on behalf of the People of Malawi.

Based on the existing Law, in 2009 Malawi developed Petroleum (Exploration and Production) regulations which provided legal basis for the demarcation of the six Oil and Gas Blocks in Malawi.

In a previous interview, Minister of Mining Rashid Gaffer also admitted that the Blocks are too big.

Gaffer said Malawi demarcated such large Blocks to help prospecting companies to study geology of the country at large while trying to identify potential areas for Oil and Gas discovery.

He said: “Now that there has been exploration work going on with acquisition of some geological information and data, Government is considering re-demarcating the Blocks.”

“You might also wish to know that during consultation meetings for review of Petroleum (Exploration and Production) Act of 1983, such issues were being raised and best international practices were being proposed by key stakeholders to be adopted in order to have sizable Blocks rather than what we currently have.

Pacific Oil Limited was the first oil search firm to leave Malawi vacating Block 6 covering the lower Shire Valley area before EFORA Energy (formerly SacOil) relinquished its licence for Block 1 covering Chitipa and parts of Karonga followed by Hamra Oil Holdings Block 2 and 3 covering the Lake Malawi area of Karonga, Nkhatabay, and Nkhotakota and then Rakgas Block 5 and 6 covering lakeshore and Shire River sides of Dedza, Machinga, Mangochi, Blantyre, Zomba, Mulanje, Thyolo and Phalombe.

86 thoughts on “Malawi Govt. seeks investors for vacant oil exploration blocks”

  1. Why did all those companies leave? Because of beaurocratic delays by govt – again.

    Do they really expect internationals to participate “again” – govt are clearly still not organized laws here or possible resizing of blocks – what international company would show any interest after others have already walked away? All the govt want is licensing fees then not allow the companies to carry out exploration until they sort the mess within the oil & gas regulations and resize the lots. More incompetence and delays after all these years with these oil blocks.

    But it is ok for as long as we have all these destructive illegal child labor small scale projects destroying the environment and no compliance with laws or regulations that is fine. Is that what Gaffar is referring to when he states more worthy locals when international companies abide by all regulatory processes – employ all these illegal small scale miners whom work for better income – totally safe sites and follow environmental regulations and all other regulations. Malawi still in the stone age – says it is making mining a priority but nothing has changed on the ground or in the govt implementing anything or approving licenses. All they do is take company fees – companies large monies spent on exploration and give them back nothing just more rules – more beuarocracy – more delays.

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