ZAMBIA (Dow Jones Newswires), May 25, 2009
The Zambian government is set to issue an international tender offering oil exploration companies the chance to bid for oil exploration blocks in its Northwestern province before the end of May, a government official told Dow Jones Newswires Monday.
The ministry of mines and minerals development has finalized work on the documents which will invite interested companies to bid for up to seven exploration blocks, located near the border with oil-rich Angola, an official at the ministry said.
"Companies will be selected through a transparent bidding process. Actual oil exploration should start before the end of this year," he said by telephone from Lusaka, the Zambian capital.
The bids are expected to be advertised in the press before the end of May, he added.
Last week, the Zambian president appointed a seven member panel to over see licensing, exploration and production of oil and gas.
The panel, headed by Maxwell Mwale, the minister of mines and minerals development, met last Tuesday to kick start the process.
Zambia announced the discovery of oil in 2007 after numerous tests on soil samples indicated occurrence of oil and gas in the mineral-rich Northwestern province. However, the country is yet to determine the size of the reserves and whether they are commercially viable.
Under the Zambian mining laws, exploration investors are required to commence work on their licensed areas within two years or risk losing the license.
Last year, Zambia amended its petroleum act to provide guidance on exploration and production of oil and gas and to added clauses to attract investors in the sector.
Zambia's mining sector is currently dominated by copper and cobalt mining and the country is Africa's largest copper producer.
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