Zambia Revises Oil Act to Attract International Bids
LUSAKA, Zambia (Dow Jones Newswires), October 2, 2008
Zambia has revised its petroleum laws in a bid to attract international oil exploration companies, the minister of mines and minerals development has told Dow Jones Newswires.
Kalombo Mwansa said Wednesday the Petroleum Act has been revised to make it investor-friendly and provide guidelines for the exploration and exploitation of the country's oil in the northwestern and western provinces.
If approved, the new law would give the Zambian president powers to repossess land believed to have oil deposits from locals for allocation to oil exploration companies.
The law would also allow prospecting companies to recover money spent on exploration activities when production starts.
It would also provide tax breaks on imported exploration equipment as well as on commodities like fuel.
"The bill is now before the acting president, we shall soon call for international tenders for the oil blocks," said Mwansa.
Last year, Zambia announced that it had discovered oil on its border with Angola, Africa's second leading oil producer after Nigeria.
According to Leonard Nkatta, the permanent secretary at the ministry of mines and minerals development, oil samples were sent to various laboratories abroad and have indicated good quality oil.
The ministry of mines is waiting for presidential approval of the act before advertising and then allocating up to six demarcated oil blocks to exploration companies by the end of the year in order to establish the size of the deposits, he added.
That approval is expected before the end of October. Successful companies will be granted exploration and production licenses separately. The ministry will initially offer exploration licenses and production licenses will only be offered after commercial oil reserves have been discovered.
Oil exploration companies will only have 90 days to commence exploration works, or risk losing their rights.
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