Two additional companies awarded with exploration rights by Malawi amid unresolved lake dispute

Malawians and Tanzanians have been waiting for a decision to be made by the Africa Forum of Former African Heads of State and Government on the ongoing dispute between Tanzania and Malawi over Lake Malawi (or Lake Nyasa as the body of water is known in Tanzania). However, the expected deadline, the end of September 2013, has come and gone.

Malawi’s Ministry of Foreign Affairs and Cooperation announced that there is no new deadline. Spokesperson for the ministry, Quent Kalichero, tried to explain the delay

Indeed, the mediation team was initially given up to September to conclude the mediation process. However, the team indicated that there were some technicalities that were not in place then, that made it not possible for the work to be done by the set deadline.

There has since been movement on the technicalities, and the Government of Malawi hopes that the mediation process will be finalised in the shortest time possible.

You will recall that the team travelled again to Lilongwe in September, to give an update on their work. They wanted Malawi’s and Tanzania’s position on some issues to do with the dispute over the lake.

Despite the ongoing dispute, the Malawian government has awarded two further companies, RAKGAS (United Arab Emirates) and Pacific Oil & Gas (Singapore), with rights to explore for hydrocarbons along the Malawi Rift, which is characteristic of the western branch of the East African Rift system. This decision was made in late October when the Licensing Committee met to review applications for (reconnaissance, exploration and mining) licences; it had been almost 1 year since the last committee meeting.

The area with potential for hydrocarbons has been divided into 6 blocks. 4 companies have now been awarded exploration rights to these blocks.

  • Block 1: SacOil (awarded in 2012, 12,265 square kilometres, north-western block bordering Tanzania and Zambia, all environmental work expected to be complete by Q3 2014)
  • Blocks 2 & 3: Surestream Petroleum (awarded in 2011, 20,000 square kilometers, north and central blocks on Lake Malawi)
  • Blocks 4 & 5: RAKGAS (awarded in 2013)
  • Block 6: Pacific Oil & Gas (awarded in 2013)

Thus Kainsha Energy’s bid for an exploration licence for one of the blocks has been unsuccessful.

4 companies given rights to explore 6 blocks along Malawi rift (images courtesy of SacOil and Surestream Petroleum)

4 companies given rights to explore 6 blocks along Malawi rift (images courtesy of SacOil and Surestream Petroleum)

Kalichero highlighted that the companies will not explore in contested waters and indicated that “there is nothing wrong with the awarding of the licenses. Discussions are underway on the dispute“.

Nevertheless, The Wall Street Journal has placed Surestream Petroleum and SacOil among a

[…] breed of wildcatters who deploy a risky and sometimes lucrative strategy: Look for oil in politically or geologically fraught lands after cutting deals with governments that claim the lands, even if those claims are in dispute.

[…] U.K.-based Surestream Petroleum Ltd. and South Africa’s SacOil Holdings Ltd. said last year they secured rights from Malawi in an area Tanzania claims. Officials for the companies and countries declined to comment or didn’t respond to inquiries.

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7 responses to “Two additional companies awarded with exploration rights by Malawi amid unresolved lake dispute

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