High prospects for oil in Malawi

By Chiku Jere

Exploration work currently being pursued by multinational firms in Malawi’s stretch of the oil rich Great African Rift Valley has unveiled high prospects for oil discovery.

Head of Oil and Gas Desk in the Ministry of Natural Resources, Energy and Mining, Cassius Chiwambo, tells Mining & Trade Review that the surveys have strongly indicated that there are thick sediments ranging from 2500 to 3500m that could be a source of hydrocarbons.

The Malawi Government demarcated the country’s oil prospecting area into six blocks and awarded Block 1   to Efora Energy (formerly SacOil Holdings Limited), Block 2 and 3 to Hamra Oil, Block 4 and 5 to RAKGAS MB45, and Block 6 to Pacific Oil and Gas.

Chiwambo explains that as is the case with global petroleum sectors, Phase 1 exploration work conducted by the companies has so far involved desk studies, airborne surveys, seismic surveys and data interpretation, geomapping for blocks on ground, and environmental impact assessments.

He says:

Most of the companies have conducted desk studies and surveys like the airborne gravity and magnetic surveys, and airborne full tensor gradiometry surveys which showed positive results. The companies are now preparing to conduct ESIAs with the guidance of the Environmental Affairs Department.

Chiwambo says after the ESIAs, the companies will move to Phase 2 which requires importation of drill equipment to start preliminary drilling of exploration wells for determination of availability of hydrocarbons.

The Ministry of Natural Resources, Energy and Mining established the Oil and Gas Section under the Department of Mines to be responsible for all upstream (exploration and production) activities in Malawi.

Among other functions, the section administers licences and facilitates negotiations with companies on behalf of the government for the benefit of Malawian citizens.

Normally the negotiation process includes other stakeholders such as government’s relevant ministries, departments and agencies.

The other functions of the Section are; inspection and where necessary supervising exploration works by companies for both onshore and offshore operations, conducting community sensitization meetings, inspection of alleged oil spillages, updating and developing the legal and regulatory frameworks which include revising the Petroleum Act, developing the National Petroleum Policy, and Oil and Gas’s Local Content Policy and developing the model Petroleum Sharing Agreement (PSA).

The Section also participates in global oil and gas forums and conduct capacity building for government officials involved in oil and gas operations through international short-term and long-term trainings.

Currently, the Section is committed to revising and developing the legal and legislative frameworks for the oil and gas sector in Malawi,

says Chiwambo.

***

This piece was initially published in Malawi’s Mining & Trade Review Issue Number 63 (July 2018).

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