20 April 2017

Malawi: MPs Concerned With 'Shortcuts' On Lake Malawi Oil Exploration

Parliamentary Committee on Natural Resources and Climate Change chairperson Werani Chilenga has said the decision by government to to proceed with oil and gas exploration in Lake Malawi amid resistance from environmentalists is worrying, saying there should be a petroleum policy and a revised Petroleum Act.

Chilenga and his committee on Tuesday met officials of the Ministry of Natural Resources, Energy and Mining to find out why government is proceeding with the drilling when the country is using "outdated law the 1983 Petroleum Act."

Said Chilenga: "We are not comfortable with thus scenario."

He clarified that the committee is not against oil exploration but they are opposed to "shortcuts".

According to Ministry of Natural Resources, Energy and Mining head of oil and gas section Cassius Chiwambo, and the department is currently doing the paperwork with companies awarded exploration licences in 2011. They include Rak Gas, MB45 (Malawi) Limited and Hamra Oil (Malawi) Limited.

Chiwambo acknowledged that there is no petroleum policy but said they rely on Petrolium Act of 1983 "which was approved by the same parliament."

He explained that before granting the initial licences, Malawi had already put in place a Petroleum (Exploration and Production) Act approved in 1983. In addition to the 1983 law, the country also reviewed the Regulation to the Act in 2009.

Chiwambo said as a way of ensuring that the licence holders have some specified 'obligations', government developed a 13-page licence format carrying some special conditions which were binding once the licences are awarded to the investors.

He said government cannot stop the potential investors yet, on exploring the lake for oil, because it uses the 1983 Act of Parliament which gives sit powers to do so.

"We are not clinging to the old Acts; it is only that there are many problems facing the ministry in reviewing such Acts. Be assured that we are working hard on this and the Bill will be brought to Parliament," he said.

President Peter Mutharika during the 2017 World Water Day commemoration and National Water Conference last month declared that "as a country, we need to move forward." with oil exploration in Lake Malawi.

Malawi which ranks lowly in most human development and economic indicators, eyes the oil, gas and mining sector as an alternative to the dying green gold, tobacco--the major forex earner.

The move has already stirred up some interest from several European and Asian nations who are seeking to either provide technical support to Malawi's fledgling gas and oil industry or act as investors.


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