Zambia gives 12 oil exploration firms default notice

LUSAKA, July 24 (Xinhua) -- The Zambian government has issued default notices to 12 local and foreign companies for failing to commence work within 90 days of granting the license, the Post of Zambia reported on Wednesday.

According to the country's law on petroleum exploration and production, a license holder should commence exploration within three months after being awarded the license and that the license holder should also give timely reports on the progress being made and challenges faced. The government had issued 17 petroleum exploration licenses to 12 companies that were currently carrying out explorations in seven of the country's 10 provinces.

"But these companies have not been following the regulations and we think they are holding on to the licenses for speculative purposes, so we have written to them and if they will not provide adequate answers, we have a right to cancel the licenses and invite interested companies to bid," Deputy Minister of Mines, Energy and Water Development Richard Musukwa said.

Among the foreign firms given exploration licenses are Exile Resources of Canada, Petrodel Resources of France, Mineks International of Turkey and Rapid African Energy Holdings of Mauritius. The local firms include Barotse Petroleum Limited, Mettproso-Frontier, Majetu, Mafuta Energy, Gapex, Chat Milling, Terralinna Zambia and ZCCM-IH. The Zambian minister said no oil reserves have been detected so far in areas where exploration work is going on.

Between 2007 and 2010, the country's Geological Survey Department carried microbial prospecting technique to assess the potential of oil and gas in the southern African nation and the findings of the survey revealed a presence of microscopical bacteria known as hydrocarbon oxidizing bacteria that feed on the hydrocarbon gases which seep to the earth's surface from a petroleum basin. The findings prompted the government to demarcate areas into blocks for interested companies to bid for prospecting licenses. The government recently announced that it had demarcated 77 new blocs for exploration of oil and natural gas deposits in efforts aimed at discovering new energy sources.

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