The piece “MPs drilled on oil operations” featured below was initially published in Malawi’s Mining & Trade Review Issue Number 29 2015 that is circulating this September 2015.

The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.

The publication announced its rebranding this month, moving from the Mining Review to the Mining & Trade Review

The decision to rebrand has come about in response to some of our readers from other economic sectors in addition to mining who want to be incorporated as stakeholders.

MPs drilled on oil operations

By Chiku Jere

In an effort to make Members of Parliament understand mining issues, government with funding from United Nations Development Programme organised a day-long workshop where parliamentarians were taken through the processes regarding the oil and gas industry operations.

During the event held on August 11, 2015 at Sunbird Lilongwe Hotel, Deputy Director at the Department of Mines, Peter Chilumanga, made a presentation outlining the formation and structures, exploration, drilling, production, and post-production of oil and gas.

Chilumanga schooled the MPs that formation of oil takes millions of years.

He described oil as an organic matter compound (Hydrogen and Carbon) whose formation begins with accumulation of organic matter on the sea and delta beds.

Chilumanga said tons of organic matter is accumulated shaped by tinny organism like plankton and algae which are in the process covered by sediments due to the erosion process on the mountains.

Little by little, Chilumanga said, these sediments shape layers which are bigger and after millions of years the organic matter is trapped thousands of feet beneath the surface where under the right conditions of pressure and temperature, decomposition takes place, transforming the matter into hydrocarbons.

The accumulation of sediments and the organic matter trapped shape reservoirs, which are a subsurface body of rock  surrounded by impermeable rocks with enough porosity for keeping fluids, such as gas, oil and water and can be classified as gas reservoirs or oil reservoirs,

he said.

One of the MPs who attended the function Alex Major, a parliamentarian from Kasungu West, who is also deputy chairperson for Parliamentary Committee on Natural Resources and Climate Change, described the workshop as very important because it gives members of parliament the opportunity to understand issues as regards the mining sector.

We need to have such topical presentations now and then so that, as law makers, we are able to deliberate and present our arguments on such issues based on a well-informed points of view,

said  Major.

Among other corresponding presentations made to the MPs on the day included the Status of Energy Resources in Malawi, by an official from the Department of Energy, the state of Biotechnology and Biosafety – Opportunities and Concerns as well as Environment and Outlook 2010 which was respectively presented by Mrs. Caroline Theka and Mr. Benon Yassin, all from Environmental Affairs Department.

Malawi is believed to have massive deposits of oil and gas reserves mainly on Lake Malawi and some exploration is already taking place as several companies have already been granted hydrocarbons prospecting tenements.

The Government divided the Lake Malawi peninsula, which has prospects for oil discovery into six blocks with Block 1 tenement granted to a South African Company, Sacoil Holdings, Blocks 2 and 3 to United Arab Emirates (UAE) firm Hamra Oil Holdings; Blocks 4 and 5 explorations rights to UAE firm RAKGAS, while Block 6 licence was granted to another expatriate firm Pacific Oil Limited.

Hamra Oil and RAKGAS have since completed Full Tensor Surveys for their Blocks but Pacific Oil is yet to conduct the same, following the suspension order for oil exploration by the Malawi Government, aimed at giving a chance for the review of oil exploration licence terms.

Meanwhile, ten months down the line, government is yet to lift the suspension order, a move which is creating anxiety and panic among the investors in the industry.

Ironically, Malawi Government has gone full-throttle upping its promotional    efforts to attract investors into mining and other key sectors that are seen to have the potential of contributing to the projected growth of the country’s economy.

With funding from World Bank and European Union through Mining Governance and Growth Support Project (MGGSP), Malawi has launched new Mines and Minerals Policy, the development of the Artisanal and Small Scale Mining Policy is underway, so is the reviewing of the Mines and Minerals Act of 1981 and Petroleum Exploration and Production Act of 1983.