APM speaks on oil licences

President Peter Mutharika has said government is reviewing six licences issued to prospective investors to explore the availability of oil on Lake Malawi following concerns of irregularities during their award.

Speaking in a special programme with taxpayer-funded Malawi Broadcasting Corporation (MBC) at Kamuzu Palace in Lilongwe, Mutharika said generally, as a nation, Malawi has not benefitted from minerals due to poor bargaining at the initial stage.

APM speaks on oil licences
APM speaks on oil licences

Said the President: “I think we need to review the way we award licences to institutions which have the capacity to explore [for] minerals in this country.

“We will review that and if we see that there were irregularities, the licences will have to be revoked.”

The President said in the event that there is oil on the lake, the process of awarding contracts for drilling will be transparent so that Malawi benefits from its mineral resources.

“I am a trustee of Malawi Government property and resources and I will not allow them to be exploited.

“If Malawians can’t benefit from these resources, then we will let them [resources] lie idle for the future generations to use, otherwise we have to be wise in these dealings,” he said.

Government awarded six contracts to six companies to explore for the availability of oil on Lake Malawi after revelations that the lake had large deposits of the commodity.

In July this year, government hinted at cancelling then renegotiating production sharing agreements (PSAs) with companies awarded licences to explore for oil and gas in the country.

Minister of Justice and Constitutional Affairs Samuel Tembenu told our sister newspaper, Nation on Sunday, that government had completed reviewing the matter and would announce its position after meeting oil companies. However, a planned meeting failed due to communication breakdown between the two parties.

Under the PSA, a licenced company extracts and develops the resource in return for a share of the production. The companies usually meet exploration and development costs.

In recent years, mining deals in Malawi have come under scrutiny from stakeholders, including local and international civil society organisations (CSOs) who have alleged the country got raw deals.

So far, there has been bad publicity regarding the biggest mining venture Paladin (Africa) Limited’s Kayelekera Uranium Mine in Karonga as well as the Globe Metals & Mining Limited’s niobium mining project at Kanyika in Mzimba.

 

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