Mutharika admits Malawi has not benefitted from minerals, reviewing oil licences

President Peter Mutharika has conceded that Malawi has not benefitted from minerals due to poor bargaining at the initial stage, saying 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.

President Peter Mutharika:  Malawi should benefit

President Peter Mutharika: Malawi should benefit

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

“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,” said Mutharika in a special programme with taxpayer-funded Malawi Broadcasting Corporation (MBC) at Kamuzu Palace in Lilongwe.

Mutharika said as “a trustee of Malawi Government property and resources” he 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.

Attorney General Kalekeni Kaphale produced a legal opinion on the 6 oil exploration blocks the government has awarded and the subsequent production sharing agreements the government signed on 12 May 2014.

Kaphale raised concerns that production sharing agreements were signed before production licences were awarded and oil and gas discoveries were made.

He has also called for further investigation into the corporate relationship of three companies (Hamra Oil, RAK Gas and Pacific Oil) that control five out of six blocks, even though related parties by law (Petroleum (Exploration and Production) Act 1983) can only control a maximum of two contiguous blocks.

Rak Gas is owned by the Government of Ras Al Khaimah, one of the emirates of the United Arab Emirates (UAE) while Hamra describes itself as a Cayman Island origin private company.

Pacific Oil says it is part of Vega Petroleum Limited—the privately owned oil and gas entity that has oil producing and exploration concessions in Egypt.

Kaphale also notes that the ministry proceeded to sign production sharing agreements (PSAs) with the companies against advice from the Solicitor General to only agree to PSAs after the oil or gas is discovered.

In 2011, Blocks Two and Three were issued to Surestream Limited, which later farmed to Hamra Oil in a joint operating agreement and farming out agreement. Hamra now owns 51 percent equity in the blocks, according to the opinion.

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Bikiloni Nachipanti
Guest

Dzuka Malawi we dzuka, lija ndikale unayamba kugona.
Dzuka Malawi we dzuka akulemela ndiobwera taona.
Dzuka Malawi we dzuka timange dzikoli pamodzi.
Dzuka Malawi we dzuka..

Thyolo Snakes
Guest
It was Callista Mutharika and Grain Malunga who initially signed the agreement with Surestream. Then Pitman sold the controllin shares to Hamra. The reason is, the Briton had no money to invest in the exploration and actual minin activity, while the Arabs have huge capital for such undertakins. As regards revokin of the licences, Malawi is to lose big time becoz with the unreliable oil prices on the market it will be difficult to find another investor willin to risk the money in the everfluctuatin oil market. The President must be dumb and naive enough to believe that the Americans… Read more »
Dominic
Guest

Malawians, let us respect to the word of God, tisachimwe poyankhula, pochita ndinso poganiza. Why do we all go to church and Mosque?

mzungu wa nzeru
Guest

The president is doing nothing wrong. Don’t judge everything based on your political block Mbava ndi inuyo askufoilitsani

Charter
Guest

Mwadziwa liti a nduna muthharikha kuti agreements were poorly negotiated? Bwezani kaye ma kickbacks a Paladin onse ali ku Aus and Portugal nde mutiuze wise apa!

kamphandila
Guest

Poor Malawians the above comments don’t make sense,the president is right.don’t just make comments out of hate.be constructive in the way you speak

Chimani. Game
Guest

Chachimbwe

Real Patriot
Guest

No transparency in anything.We shouldn’t let our God given natural resources exploited for the benefit of the few greedy politicians and some crooked people masquerading as investors.For how long will Malawi keep on being hoodwinked by these stone hearted people?

Sapitwa
Guest

Contracts though singed can be reviewed. There is always a clause for termination hence if some anomalies have been des covered, then revoke the licenses.Malawians need to benefit on
Projects of this magnitude.
Kayelekera was a damn mistake. I also don’t like the benefits on royalties to be fully to the Government leaving the people around the areas so poor. Take for instance areas where Tea is grown in Thyolo, Mulanje and other places, people are so poor because all the land rates if any are not enjoyed by the Districts.

Manga
Guest

Get some tips from Undule Bwana APM ! Don’t mess around as your brother did on Paladin.

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