UK firm signs Lake Malawi oil exploration deal

There is ongoing debate on many Malawian internet discussion forums regarding the granting, in 2011, of an oil exploration licence on Lake Malawi to a British firm, Surestream. Views on this deal have been mixed, ranging from environmental concerns considering the importance of Lake Malawi to people’s livelihoods and as a tourist destination; to political concerns particularly in view of the strained diplomatic relations between United Kingdom and Malawi.

Some commentators have questioned the wisdom of granting the oil exploration licence to a British firm when the British Government has withheld its development aid to Malawi due to the recent diplomatic wrangle between the two countries that led to the two governments expelling each other’s High Commissioners. In response to one such comment, I offered the following opinion:

As many have rightly argued, the British Government has indeed withheld aid to Malawi. However, they have not stopped "trading" with Malawi. Every economy thrives better with more trade. The oil exploration deal between the Malawi Government and Surestream is a trade deal and therefore, is not and should not, in my view, be affected by the diplomatic wrangle between the two governments. Business and trade between the two nations should continue for the benefit of the people of the two nations. Besides, efforts are already underway to try and amicably resolve the strained relations.

On Surestream and its oil exploration rights on Lake Malawi, I have been able to establish more information on their website. In 2009 or thereabouts, Surestream was awarded a similar licence in Burundi to explore oil on Lake Tanganyika. You will probably be aware that Lakes Tanganyika and Malawi are both Great Rift Valley Lakes. In Burundi, the company has gone a step further to institute an environmental impact assessment (EIA) - this signals that there is oil in Lake Tanganyika:

Surestream says: "Lake Tanganyika is perceived by some professionals as an analogue of Lake Albert where the discoveries that have been made to date are close to 2 billion barrels. This view has aroused more and more interest among the oil industry". http://www.surestream-petroleum.com/news.aspx

In Uganda, oil drilling has already started in Lake Albert. In Tanzania Total has already been granted a license to start drilling for oil in Lake Tanganyika. I dare say, considering the similarities between Lakes Albert, Tanganyika and Malawi, there are serious prospects of similar or even more quantities of oil in Lake Malawi.

As long as the cost-benefit analysis is favourable or points to more benefits and that we can manage or mitigate the externalities (including environmental) caused by the mining venture (including oil exploration) then let us go for it. How the benefits are managed and distributed is of course also a matter of policy - it can be resolved for the benefit of the nation at large.

Dr Kennedy Lweya