Despite government promising to support the growth of the mining sector to become one of the main foreign exchange earners, the department tasked to look after the oil and gas sector seems to have no capacity and resources to perform, according to a recent report.
The sector has been facing challenges ranging from government’s promotion of oil exploration in the absence of a clear policy framework, adoption of a production sharing system without a clear legal framework and fast tracking the finalisation of the contract negotiations, according to the recent Malawi Extractive Industry Transparency Initiative (Mweiti) report.
The report says technical officers at the Department of Mines do not have continuous trainings to ensure independent and competent analysis when conducting field verification visits where oil and gas companies are operating.
Reads the report in part: “The current structure of the oil and gas division at the Department of Mines lacks capacity to conduct proper desk analysis of the technical reports submitted by companies and field verification to appreciate the accuracy and actual interpretation of the reports and surveys.”
The report says lack of capacity in government structure does not allow suitable control of the companies’ activities to assess if they are meeting their legal and contractual obligations.
The report has recommended a review of the oil and gas division to allow all technical officers to access relevant training and capacity building programmes.
“The training workshops can be conducted by hiring experienced and independent professionals for technical assistance,” reads the report.
Responding to a questionnaire on Saturday, Ministry of Natural Resources, Energy and Mines spokesperson Sangwani Phiri confirmed that the sector is facing numerous challenges.
“The sector faces challenges of inadequate funding and human capacity building to perfect its performance,” he said.
The 2018 Malawi Government Annual Economic Report shows that Malawi has high prospects of oil with surveys indicating thick sediments ranging from 2500 to 3500 metres that could be a source of hydrocarbons.
Of late, there have been growing interest in the exploration of oil in the country and in 2009, government demarcated the country into six blocks and granted exploration licences to a number of companies.