Fueling the Dispute Between Malawi and Tanzania: Malawian Government Awards License to SacOil to Explore for Oil in Lake Malawi

A South African Johannesburg-based independent upstream oil and gas company, SacOil Holdings Limited, has been awarded an exploration license in Malawi (12 December 2012). The license was signed by the Malawian Government’s Minister of Mining, John Bande.

This has the potential to fuel tension between the Government of Malawi and Tanzania as they are currently disputing ownership of Lake Malawi, as we have blogged about before. We will monitor this story as it unfolds.


The company announced today that

This award [in Malawi] dovetails with SacOil’s strategy of building a balanced upstream oil and gas portfolio through the acquisition of early stage opportunities in Africa similar to that which has already been demonstrated by the company in the DRC.

During the initial four (4) year period it is envisaged that desktop studies and the acquisition of gravity and magnetic data will take place in order to evaluate the petroleum potential of the block. The financial obligation on SacOil for the initial 4 year period is a total of US$2 million.

SacOil’s CEO, Robin Vela, has said

We are delighted at the award of the licence; it represents our firm commitment to grow our asset base on the African continent and drive shareholder value. This is in line with SacOil’s strategy of building and developing a uniquely African portfolio.  In addition, it gives effect to our drive to unlock under-explored regions in Africa.

Facts about the license and the company

  • SacOil awareded an onshore petroleum prospecting license for Block 1 in Lake Malawi (100% equity interest and operator status).
  • 4-year period with the possibility to renew three times for three-year periods while exploration data is reviewed.
  • Block 1 is in the north-western part of Malawi. It borders Tanzania to the North and Zambia to the west.
  • 12, 265 square kilometres (second largest petroleum exploration license demarcated in Malawi)
  • SacOil rose 6.5 percent to 33 cents in Johannesburg trading, the biggest one-day gain since Oct. 15 (Bloomberg).
  • SacOil has a block an offshore oil field Delta Region in Nigeria and exploration rights in the Democratic Republic of Congo (it was granted a 3 177 km2 Block 3 prospecting licence in 2010 in the DRC).
    The asset in the Congo is an oil block known as Block III, in the eastern part of the country that borders with Uganda. SacOil has a 12.5% effective interest in Block III. Its other interests are 20% stakes in two blocks in Nigeria — OPl 281 and OPL 233. It is reportedly moving closer to production in Nigeria and the DRC.
  • SacOil has recently disposed of its noncore Greenhills manganese processing plant in Mpumalanga to be focus on the core oil and gas business. According to Siseko Njobeni of Business Day “SacOil revenue from the plant had continued to deteriorate because of what it said were employment and maintenance problems, and the extensive need for capital investment. SacOil sold the plant to management and staff for R7m.”
About these ads

10 responses on “Fueling the Dispute Between Malawi and Tanzania: Malawian Government Awards License to SacOil to Explore for Oil in Lake Malawi

  1. Pingback: Mozambique to Mediate Lake Malawi Dispute | Mining in Malawi·

  2. Pingback: Mining in Malawi·

  3. Pingback: National Positions on Lake Malawi/Lake Nyasa: How far back will countries go? | Mining in Malawi·

  4. Pingback: Tanzania and Malawi’s Lake Dispute Features in State of the Nation Address in Malawi | Mining in Malawi·

  5. Pingback: Minister Talks about Prospects for Mining Companies in Malawi at Mining Indaba [Video] | Mining in Malawi·

  6. Pingback: SacOil begins planning of Environmental and Social Impact Assessment for exploration of Lake Malawi (Block 1) | Mining in Malawi·

  7. Pingback: Oil extraction and military force: concerns of Malawi’s lake shore communities as dispute remains unresolved | Mining in Malawi·

  8. Pingback: Joyce Banda discusses Lake Malawi dispute with former heads of state from Mozambique, Nigeria, South Africa, UK and US | Mining in Malawi·

  9. Pingback: Missed off the 2013 SADC Summit agenda: Lake Malawi dispute | Mining in Malawi·

  10. Pingback: 20 days until former SADC leaders are expected to announce decision on Malawi-Tanzania Lake Dispute | Mining in Malawi·

Leave a Comment, Question or Suggestion

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s