Malawi Misses Upstream Deadline

Malawi has missed its November 2017 target to come up with an updated hydrocarbon policy framework to attract upstream investors.

Originally, the new Petroleum Policy was scheduled for release in July 2017 but only a draft was issued.  The government later pledged to release it in November but failed, Cassius Chiwambo, head of oil and gas in the Ministry of Environment, Energy and Mining told NGW December 18.

Malawi's President Peter Mutharika halted gas and oil exploration in and around Lake Malawi in November 2014, seven months after his election, following a licensing scandal involving senior government officials, his predecessor Joyce Banda, and alleged bribe payments for exploration rights. Days before she lost an election in May 2014, Banda's government granted a total of six exploration licences to three firms -- Singapore's Pacific Oil, RakGas from the United Arab Emirates (UAE), and Hamra Oil also UAE-based – despite the country not having a procedure for approving their applications.  Critics have said the fiscal terms were "over-generous."

Chiwambo told NGW that Malawi’s draft National Energy Policy (NEP) calls for more exploration and addresses some, but not all, of the regulatory issues that the planned Petroleum Policy will address.

Lake Malawi sits at the southern tip of the East African Rift Valley, a geological formation that runs through Ethiopia, Kenya, Uganda, Rwanda, Burundi, Zambia, Tanzania, Malawi and Mozambique and holds substantial if not always easily commercialised oil and gas reserves. Total, China's CNOOC and UK-based Tullow are looking to develop substantial oil reserves in Uganda and build a $3.5bn pipe to the coast.

Chiwambo also notes that a review of the Petroleum (Exploration and Production) Act of 1983 is ongoing. He says the government cannot grant further licences while the legislation and policy governing oil and gas are under review. He declines to say when this will be completed; however according to multiple reports, Malawi's parliament is expected to adopt a revised law by end-2018.