Malawi laws breached in oil search, says Attorney General

The three companies controlling five of the six oil and gas exploration blocks – Rak Gas, Pacific Oil and Hamra Oil Holdings Limited -are controlled by one group designed to get a Lions share of the oil blocks by using any trick in or outside the book, Attorney General (AG) Kalekeni Kaphale has noted in legal opinion to the Ministry of Natural Resources, Energy and Mining.

Kaphale says the country’s laws were breached in the award of the now suspended oil and gas exploration licences in Lake Malawi and other parts of the country.

Rak Gas is owned by the Government of Ras Al Khaimah, one of the emirates of the United Arab Emirates (UAE) and local company secretary is Z Allan Ntata while Hamra describes itself as a Cayman Island origin private company whose local general manager is Ben Chiza Mkandawire. Pacific Oil is part of Vega Petroleum Limited—the privately owned oil and gas entity that has oil producing and exploration concessions in Egypt.

Geologist Chimwemwe Chikusa was responsible for registering all three Arabic companies in Malawi.

In his legal advise, the Attorney General stated: “ We must cancel all the exploration licences or at a bare minimum, licences for blocks Four, Five and Six as having been entered into with parties that are related to Hamra Oil Limited, which has controlling interest in two blocks already as these are the maximum a party can get.”

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.

Kaphale has suggested that government invites Hamra, Rak Gas and Pacific to choose “which two contiguous blocks they want to continue exploring and make them relinquish their interest in the rest.

The exploration of oil on Lake a Malawi is still a contentious issue as locals from the lake shore districts protest the move claiming the project has the potential to kill fish which they depend for a living while on the other side, there is still a heated argument which has not been resolved with neighbouring Tanzania which claims that half of the Lake is hers contrary to Malawi claims that she wholly own the Lake.