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Questions over oil exploration

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Malawi has been asked to set up a strong regulatory environment before fully embarking on oil exploration activities to avoid consequences arising from oil spillage, among others.

Malawi has six blocs for oil and gas exploration. However, China National Petroleum Corporation (CNPC) has said countries like Malawi need to guard against environmental degradation and other forms of exploitation common in the oil industry.

The Corporation’s Deputy Director for International Department, Wang Hongtao, said new entrants should prepare strong regulatory environments that protect their interests while at the same time making such investments profitable to the investors.

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“Emerging countries in the sector should have swift processes to facilitate investments as the sector is dynamic. There is also need to speed up processes and make sure there is fair competition among companies,” he said.

Two years ago, government asked all companies involved in oil and gas exploration in the country to cease their operations to give way to a review of all licenses previous governments granted to companies to explore for oil to in the country.

The process was meant to determine the manner in which the licenses were given and the procedures that were followed.

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Government said then that the process was necessary as it would ensure that the licenses that were granted or the agreements that were signed are for the benefit of the people of Malawi and that they were done in accordance with all the relevant laws of the country.

Economic commentators welcomed the developed on the basis that it would promote transparency in the country’s extractive industry.

The analysts said most African countries fail to benefit from exploration ventures as issues of licensing are shrouded in secrecy and corruption.

However, the licenses were later reinstated amid divisions on the viability of oil exploation in Malawi.

Government has in recent years been under pressure from civil society groups to review the Mines and Minerals Act of 1981 described by experts as being 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.

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