{"id":4622,"date":"2017-05-15T00:00:00","date_gmt":"2017-05-15T00:00:00","guid":{"rendered":"https:\/\/amabhungane.org\/amabhungane\/stories\/malawi-oil-contracts-under-probe\/"},"modified":"2024-09-23T11:06:49","modified_gmt":"2024-09-23T11:06:49","slug":"malawi-oil-contracts-under-probe","status":"publish","type":"post","link":"https:\/\/further.co.za\/amabwp\/malawi-oil-contracts-under-probe\/","title":{"rendered":"Malawi oil contracts under probe"},"content":{"rendered":"

Malawi\u2019s Anti-Corruption Bureau has launched an investigation into whether money irregularly changed hands during the rushed signing of production-sharing agreements on three of Malawi\u2019s petroleum blocks just eight days before the 2014 elections in the country. The probe was requested by a range of Malawian civil society organisations and international NGO Oxfam.
\n<\/strong>
\nThe awarding of six petroleum exploration licences between 2012 and 2014, under the former presidencies of Bingu wa Mutharika and Joyce Banda, was fraught with controversy.<\/p>\n

Less than two weeks before the hotly contested poll in May 2014, Banda\u2019s government entered production-sharing agreements with RAK Gas MB 45 \u2013 a subsidiary of the United Arab Emirates\u2019 state-owned RAK Gas registered in the secrecy jurisdiction of the Cayman Islands.<\/p>\n

The deal was reached before any proven oil discoveries.<\/p>\n

According to the records of the Reserve Bank of Malawi, RAK Gas made an unexplained payment of $235,700 (89-million Malawi kwacha) to the Reserve Bank\u2019s account for the government\u2019s mines department before the exploration licences were handed out.<\/p>\n

The unusual wire transfer was picked up and queried by independent consultants LBN Strategies of Cologne, Germany, and Lilongwe-based Resources M&E while examining the Reserve Bank\u2019s accounts as part of a scoping exercise for government.<\/p>\n

Last year RAK Gas\u2019s Malawi country manager, Chimwemwe Chikusa, told the Centre for Investigative Journalism Malawi <\/a>that the payment was for licence fees and the annual ground rent on the oil concession.<\/p>\n

Malawi\u2019s non-government pressure group for the extractive industries, the Natural Resources Justice Network, was unconvinced. \u201cWhat was this money for and how has it been used?\u201d it asked in a press release.<\/p>\n

Sources in the Anti-Corruption Bureau, as well as senior members of Banda\u2019s People\u2019s Party, who asked not to be named, also queried a pre-election payment of $5-million by RAK Gas to Banda\u2019s Mudzi Transformation Trust, which built or renovated houses for the poor in Malawi.<\/p>\n

Chikusa and Banda\u2019s spokesperson, Andekuche Chantunya, both told the CIJM that the donations were part of the company\u2019s corporate social responsibility programme.<\/p>\n

The Malawi government divided Lake Malawi into six segments for oil and gas exploration. The licences for blocks 4 and 5 were held by RAK Gas MB45, a Cayman Island subsidiary of the state oil company of the Ras Al Khaima Emirate in the UAR.<\/p>\n

Malawi\u2019s graft-busting body, the ACB, confirmed that it is probing RAK Gas but declined to provide more details.<\/p>\n

\u201cWe are conducting investigations in relation to payments made by RAK Gas. The bureau will not be drawn to comment more on the issue, as doing so may prejudice the investigation,\u201d said ACB spokesperson Egrita Ndala in an e-mailed response.<\/p>\n

A leaked legal opinion from the Attorney General, Kalekeni Kaphale, in 2015, suggested that some of the licences should be revoked.<\/p>\n

This was because three of the concessionaires, RAK Gas, Pacific Oil and Hamra oil, were connected by \u201ca thin corporate veil\u201d apparently intended to circumvent the rule that one company could not hold two contiguous blocks.<\/p>\n

In an analysis of the contracts published in February this year, entitled \u201cMalawi\u2019s Troubled Oil Sector: Licences, Contracts and their Implications\u201d, Oxfam objected that \u201cif oil exploration is successful, the agreements could be in place for 30 years covering exploration, extraction, and closure. These agreements give Malawi a raw deal and an incoherent fiscal package\u201d.<\/p>\n

Oxfam and its local civil society partners asked President Peter Mutharika not to endorse oil exploration in Lake Malawi, saying there were many grey areas that needed to be cleared up.<\/p>\n

\u201cGiven the purported irregularities around the initial signing of the contracts, the ongoing ACB investigation, the absence of transparency in the renegotiations being led by the Minister of Agriculture, Irrigation and Water Development, the lack of a clear petroleum policy, an updated Petroleum Act, a completed model contract and comprehensive financial modelling, we are calling on the President not to approve the exploration,\u201d they said.<\/p>\n

However, Mutharika has remained defiant. Malawi\u2019s Petroleum (Exploration and Production<\/a>) Act, passed in 1983, vests all oversight powers in respect of petroleum products in Malawi in the President, although it also empowers the responsible minister to conclude agreements.<\/p>\n

In a subsequent comment to Mining in Malawi, Mutharika implied that exploration will go ahead.<\/p>\n

\u201cUsing the available technology, we will get results similar to those obtained through offshore drilling,\u201d he told the journal.<\/p>\n

<\/a>
\nThe amaBhungane Centre for Investigative Journalism provided this story. Like it? Bean amaB supporter<\/a> and help us domore. Know more? Send us <\/em>a tip-off.<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Malawi\u2019s Anti-Corruption Bureau is investigating agreements on petroleum blocks awarded under the presidencies of Bingu wa Mutharika and Joyce Banda.<\/p>\n","protected":false},"author":2,"featured_media":22336,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4622","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4622","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=4622"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4622\/revisions"}],"predecessor-version":[{"id":30651,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4622\/revisions\/30651"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/22336"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=4622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=4622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=4622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}