SacOil, the African independent upstream oil & gas company, has announced the award of 100% equity interest and operator status in Block 1, an onshore petroleum prospecting licence in Malawi. Following due process and intensive negotiations between SacOil and the Malawian government, the prospecting licence was awarded to SacOil on the 12 December 2012. The license was duly signed by the Honourable, John Bande, Minister of Mining in the Republic of Malawi.
Block 1 is located in the North Western part of Malawi bordering Tanzania to the North and Zambia to the west. At 12,265 sq kms, Block 1 is the second largest petroleum exploration licence demarcated in Malawi. The licence is located on trend with the East African rift system which is a proven exploration province with prolific oil discoveries in Sudan, Chad, Kenya and Uganda. It is anticipated that the same Tertiary rift system will be present in Malawi. This award dovetails with SacOilâ€™s strategy of building a balanced upstream oil and gas portfolio through the acquisition of early stage opportunities in Africa similar to that which has already been demonstrated by the company in the DRC.
The term of the exploration licence is divided into an initial four (4) year period followed by two subsequent three (3) year renewal periods. During the initial four (4) year period it is envisaged that desktop studies and the acquisition of gravity and magnetic data will take place in order to evaluate the petroleum potential of the block. The financial obligation on SacOil for the initial 4 year period is a total of US$2 million.
Commenting on the acquisition, Robin Vela, CEO, said:
‘We are delighted at the award of the licence; it represents our firm commitment to grow our asset base on the African continent and drive shareholder value. This is in line with SacOilâ€™s strategy of building and developing a uniquely African portfolio. In addition, it gives effect to our drive to unlock under-explored regions in Africa.’