Oil & gas discoveries in Zambia

Oil & gas discoveries in Zambia

Lusaka – Zambia is planning to invite foreign firms to conduct exploratory drills for oil and gas after the first-ever reserves were found near the border with Angola, the government said on Monday.

Samples taken at a dozen sites in the north-western provinces of Zambezi and Chavuma over the weekend confirmed gas and oil residues in the impoverished southern African country which has previously looked to its copper reserves as the main source of foreign currency.

The announcement of the discoveries was contained in a statement from the office of President Levy Mwanawasa who visited the area on Sunday.

“The microbial analysis showed that 12 sites were positive for oil and six for gas,” Mwanawasa was quoted as saying during his field trip.

“These results confirm the presence of oil and gas in the sub-surface of the two districts of Chavuma and Zambezi,” Mwanawasa added.

‘Strengthen the economy’

Following the discovery, Mwanawasa appointed a special cabinet committee, headed by Mines Minister Kalombo Mwansa, to draw up policies and guidelines to facilitate oil and gas exploration by private companies.

“It is hoped that the country will see more exploration and extraction activities for oil and gas in different parts that would strengthen the country’s economy,” Mwanawasa said.

He said exploration companies will determine the oil and gas reserves from the two districts before expanding the exercise to other parts of the country.

The exploration was initially started in 2004 following prolonged fires that affected the areas, which prompted the government to launch an investigation.

While the size of the reserves are still not known, authorities hope that they can become a significant source of revenue in a country where some two-thirds of the population live on less than a dollar a day.

Neighbouring Angola is experiencing an economic boom as a result of its oil reserves and it is now the second-largest oil exporter in sub-Saharan Africa after Nigeria.

‘Long-term investment’

A Zambian energy risks consultant said the discovery of oil and gas was potentially a major boost to Zambia’s economy but he warned that investors would have to stump up huge amounts of money before they can expect returns.

“This will be a long-term investment which will require a lot of money,” said Charles Hanyika, who runs the Uti-Link Energy-Risk Consultant firm.

Hanyika also cautioned against becoming overexcited until the extent of the reserves became clear.

“It’s obviously good news for Zambia but we need to wait for the exploration. The excitement should come after we know the size of the reserves,” he told AFP.

Zambia’s north-western region is becoming the country’s economic mainstay following the recent huge foreign investment at Lumwana Mines, which has one of the world’s largest reserves of copper ore.

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