NuEnergy Gas begins airborne geophysical survey in Chikhwawa District, Malawi

NuEnergy Gas Investor Presentation February 2013 (Click on image to enlarge)

On 13 May 2013, Malawi’s Vice President Khumbo Kachali and the Minister for Mining John Bande participated in a ribbon cutting event to mark the commencement of NuEnergy Gas Limited‘s airborne geophysical survey at its Exclusive Prospecting License (EPL 0360/2012) site. This is the first unconventional gas exploration license to be awarded in Malawi.

The Indonesian and African focused energy company has a license that covers shale gas and Coal Bed Methane (CBM) exploration in the Mwanza river basin in Chikhwawa District, southern Malawi. The area is 346 square kilometres and the company acquired the licence for USD 100,000. The company has also identified business opportunities in the unmet demand of energy and transportation.

Malawi’s fiscal terms for CBM and shale gas provide a development incentive with 5% gross royalty and 25-30% company tax rate, according to the NuEnergy Gas’website. The company intends to undergo extensive geological and geophysical studies within its EPL area in the first half of 2013 to determine sites for drilling in the river basin. Drilling is expected to commence in the second half of 2013.

The initial field geological surveys were completed in November 2012 and the follow-up airborne geophysical survey to be conducted by New Resolution Geophysics will take 12 days (6,000, one-kilometre lines spaced 250 metres apart). According to Oil Voice, quality will be controlled through the daily verification of survey data by independent geophysicists from JMJ Petroleum.

NuEnergy’s Chairman Mr Graeme Robertson commented at the ribbon cutting ceremony,

We are delighted to commence the airborne geophysical survey in Malawi over the potentially significant Karoo shale formation contained within our license area. This program is a significant development for both Malawi and NuEnergy and it has been exciting for us to mark the occasion with a ribbon cutting event, attended by distinguished guests such as the Right Honourable Vice President and the Honourable Minster for Mines. Malawi is an under-explored emerging country rapidly gaining acceptance through its Government reforms and with major World Bank and IMF support. The country possesses significant unsupplied demand from its transport and power sectors and we remain very optimistic about the development potential of EPL 0360/2012.

Kachali, who cut the ribbon during the inauguration of the K3 million ZS-RZM helicopter to be used for the survey, claimed that efforts made to reverse the 2012 economic downturn are paying off,

The involvement of NuEnergy, Australian companies and local investors in the project signifies that the government plans [Economic Recovery Plan] have started bearing fruits. The product of the exploration shall give opportunities for the development of various industries thereby promoting job creation which shall lead to poverty reduction.

The contribution of the mining sector to poverty reduction is not inevitable. Sustainable development through the extractive industries demands good management of activities and revenue by both companies and government. The 2013 Resource Governance Index launched today reveals that this is an ongoing challenge for many countries.

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