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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36 thoughts on “Mutharika admits Malawi has not benefitted from minerals, reviewing oil licences”

  1. Bikiloni Nachipanti says:

    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..

  2. 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 or western investors, who always depend on market speculation to make easy money are seriously considerin pourin their string-tied dollars in the unchanted waters by investin in less-known Malawi minerals. Arabs have huge reserves of dollars n they can handle risk. Sometimes I wonder if it is political parties or govt that grant licences. Ben Phiri has bn milkin these Arabs of money n Mutharika comes wit this smokescreen…eish!

  3. Dominic says:

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

  4. mzungu wa nzeru says:

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

  5. Charter says:

    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!

  6. kamphandila says:

    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

  7. Chimani. Game says:

    Chachimbwe

  8. Real Patriot says:

    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?

  9. Sapitwa says:

    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.

  10. Manga says:

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

  11. .... says:

    Professors are CROOKS.
    He is reviewing licenses in orderto benefit him, Tapiwa, Duwa and callista.
    Nyapapi

  12. Nthumbetupe says:

    The president is reviewing licences for selfish motive because it’s at this point that firms pay handsomely though corruptly. If this administration was in power at the time the awards were done there would have been no review thus why no one is talking about Kayelekela currently coz it’s a DPP undertaking. Anadya kale. Don’t blond Malawians all this review business is not being done in our interest but the ruling elite kickbacks. We are watching closely.

  13. Chikweza says:

    Who benefited from Paladin? This will only create trouble with TZ.,and Moz.

  14. kadamanja says:

    Son of the bitch, you play innocent yet you are the one benefiting from these mines. If you are serious then Kayerekela should close right now.

  15. gojo says:

    Mbava zaku Thyolo.com

  16. Denguzman says:

    Zopusa basi, kodi APM ukamatiwona Amalawi umawona ngati ndife anthu opusa kwambiri eti. Iwe ukuona ngati siunapindule nawo mgodi wa Kayelekera? Matchona nonse mukukayikitsa ngati munabwera kuno kudzatukula dziko lino and ndili ndi chikhulupiliro kuti kutchona kwanu munkamuopa Dr. Banda coz nthawi ya Ngwazi mbava ngati inu nonse mukanamangidwa. Panopa mukamapanga ma prgramu anu ofuna kuwabera Amalawi musamataye nthawi mkumakhala pa TVM kumayimba magitala a mabodza ngati mukufunira zabwino dziko lathu coz Amalawi akuziwa kale kuti dziko liri mmanja mwa anthu akuba inu muzingopitiliza pamene anatsiyilira akulu anu basi.

  17. PROFESSOR DR. JAMES NAPWIRI PHIRI says:

    MUKUFUNA MUIKAKEPO ANU. WE ARE NOT FOOLS

  18. mwiithotho says:

    Atumbukaa! Shut up! Mupite mukapange federation .

  19. ToyB wakungidzi James says:

    M’bale wako bingu adali ndi ma percentage ku mineral ukunenako ndalama zimenezo wagulira dzikonda-moyo(dzigumu) ndindani? You’ve shameless face you fucken bastard. So listen up here puss!!! Before you start draining my lake malawi, show me where I shall be answering the call of nature.

  20. peter mshali ku salima says:

    or having fat acount in australia,the message the president said is we hav to keep the oil for future generation if there is exploitation,I LOVE APM

  21. Mphwache says:

    Its not only oil. I was surprised that Malawi government was signing a coal power financing deal with a Chinese company recently when a POWER PURCHASE AGREEMENT has not been signed. Who will buy this power and at what price, who will supply the inputs (coal etc) and at what price. How can you arrive at a final financial cost agreement when you dont know the cost of the inputs? If ESCOM is to buy this power (as mandated by Government) they will be robbed in broad daylight.

  22. Mthawanji says:

    Mbava kuthandiza olila crocodile tears

  23. Thats the way to go Mr President though its too late but its a quick decision at the right time. By virtue I respect the leadership of the day hence every leader is put by God to achieve its purpose, and thats what the Holy Bible says. Malawians lets pray for the leadership of this day. Njobvu zikamamenyana umavutika ndi udzu.

  24. katakwe says:

    I agree with the State President 100%. If we are not ready, then we must say no to these colonialists who want to make us poorer and poorer. I call upon the president to start building capacity in the mineral sector so that Malawians should take charge and control not mzungu.

  25. Professor Bakili Muluzi says:

    Pitara nde mbava first class.

  26. Jon Manda says:

    Peter and his late brother Bingu benefitted a lot. Asastipusitse a Malawi. He knows what transpired in those stupid days of his brother’s ruling! shutup!!!

  27. dee kay says:

    How can Malawi benefit when you send all loyalties to your account in Australia?

  28. Xander Jimmy says:

    Cancelling all those licences, including those of other mining operations i.e kayerekera will make sense , as there is alot need to be reviewed for Malawians to benefit from mining operations………otherwise piece meal review of agreement, am afraid will not lead to desired results but further exploitation and misery for Malawians………i feel mining/oil/gas investments legislations need to be ammended in such a way to allow government and other interested Malawians to hold interest in those operations……..hence preserving Malawians interests through economic empowerment!…….if they want money to top up in buying those interest…..let the government assist them through that development bank or guaranteeing loan for them….after all security is there which is their interest in such mining activities!………additional enviromental legislations need fine tuning in order for clean enviroment sustainability………..another review need to be done in taxation legislations both domestic ( thats through Taxation act) and safeguards against profit shifting and Tax base erosion due to international taxation principles (full focus need to be on content and opportunity costs of favours provided under some double taxation treaties…………….are those DTA worthy it in relation to foreign direct investments from those contracting states?………what about tax revenue?)……….

  29. MIKE says:

    Uzingokhalira kupanga review zithu but you will never succeed ndiwe muthu opanda nzeru ndinangowona kukuvotera ndimaona ngati professor amakhala wamzeru koma iwe ndiye tinabetsa. Ukadzamamwalira udzakhalanso utalitsiya dzikoli pamadvuto

  30. mtumbuka1 says:

    Don’t allow any oil exploitation or any sort of mining in lake Malawi cos it does not benefit the common man on the street. It only benefit politicians and a few individuals who are connected to the ruling elites and which African country have ever benefited from the so called oils? After all peter will be either dead or finished his term by 2024 and there will still be life after he is gone so what type of lake Malawi will our kids inherit? Some poisonous water body called lake Malawi???

  31. When will these thieves stop defrauding mother MW? If Malawi did not benefit from the mineral as he indicates, then who did? Tell us. This Mr ibu thinks he can cheat all the people all the time, but time is coming when he’ll know the reality of being a daft president. Mr Matrhanyula.

    1. ToyB wakungidzi James says:

      Zowona madala.Madolowa aim yawo ndiyongofuna kudzadza matumba awo basi.adzigula mabasi opita pokamwa kachasu

  32. Nabetha says:

    We are sick n tired of this issue not moving forward. Please tell Malawians if indeed there is oil in Lake Malawi or not. All what we hear is the issue of licences. May be we need a foreign investor to come to Malawi to open up a business of issuing licences to prospective bidders. Eeesh! We have got a very strange mentality.

  33. Jose' says:

    Please tell us the dates. WHen was the solicitor general’s advice given? When were the contracts given and when whatever happened. Who did award the contracts? Should we be shielding perpetrators when the nation should be told the raw facts so that we can make informwed decisions?

  34. nc says:

    Thieving bustard!

  35. mtumbuka1 says:

    Typical of a layman’s crocodile tears. You and your brother and the rest of the family benefited from the mines that’s why you have fat offshore accounts in Brisbane Australia. You don’t deserve any sympathy whatsoever mxiii.

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