Government restores exploration licences

Government says it has given a go ahead to some companies involved in oil and gas exploration in the country to resume their operations after a legal opinion from the Attorney General found that they were operating in compliance with their licence provisions.

Minster responsible for Natural Resources, Energy and Mining Bright Msaka confirmed that after thoroughly scrutinising the licences that were awarded under previous regimes, his ministry asked a few companies to continue exploring for oil and gas after their licences satisfied the laws governing Malawi’s extractive industry.

In December 2014, government suspended oil and gas exploration activities to give way to a review process aimed at determining the manner in which the licences were given and the procedures that were followed.

At the time, Malawi had six blocks for oil and gas exploration with exploration licences awarded to Sac Oil Holdings Ltd of South Africa, Surestream Petroleum which partnered Al Hamra Oil, Rakgas of United Arab Emirates and Pacific Oil Limited.

However, after the inception of the exploration exercise, it was alleged that three of the six companies in the sector belonged to a single shareholder but were locally registered in different names to acquire a bigger share of the exploration contracts.

And Msaka said in response to advice from the office of the Attorney General, his ministry had reinstated licences to companies that were found to be operating in compliance with laws governing the sector.

While not disclosing the names of the companies that were found to be compliant, Msaka said the Attorney General’s legal opinion also showed that some companies were in breach of their licence provisions.

“For those companies, as government, we are going to follow proper procedures before cancelling their licenses. We will give them an audience where they will be given a chance to defend their position,” he said.

The civil society has in recent years been pressuring government to review the Mines and Minerals Act which dates back to1981. The Act is said to be archaic and deficient with major gaps in areas such as licensing, community engagement and key provisions that could ensure that the country benefits more from mining ventures.