Zambia to Award Oil Exploration Licenses for 11 Blocks

(Dow Jones), Nov. 19, 2009

Zambia's government is set to award exploration licenses for 11 oil and gas blocks in the northwest, west and east of the country, the minister of mines and minerals development said Thursday.

Seven companies have been selected as successful bidders for the 11 blocks, and government is now in the process of awarding them licenses, Minister Maxwell Mwale said.

"Successful bidders should commence petroleum exploration activities immediately," he said in a statement.

Another 12 blocks would be opened up next year, he said. In June, Zambia issued an international tender for 23 blocks located near the border with oil-rich Angola.

The seven successful bidders are Canada-based oil and gas company Exile Resources Inc., U.S.-based Glint Energy LLC, GP Petroleum and Petrodel Resources Ltd. of the U.K., and three local companies, Mwale said, without revealing which blocks they had been awarded. Company officials could not comment immediately.

A ministry official told Dow Jones Newswires separately that Exile Resources would be licensed to explore for oil in Block 26, while Glint Energy would be licensed to operate blocks 2,3 and 4, all located in the northwestern and western provinces. GP Petroleum was the successful bidder for block 22, and Petrodel Resources would be awarded block 17.

Bidding for the 12 remaining demarcated blocks will close in June next year, the official said. Bidders are required to pay a nonrefundable fee of $10,000 per block for the data packages.

The government's petroleum panel is now in the process of demarcating other oil blocks, also to be offered next year.

Zambia wants to establish the size of its oil reserves as it seeks to start oil production and end over-reliance on copper and cobalt mining.

The country also wants to end over reliance on imported fuel, which has left it prone to erratic fuel supplies in the past couple of years. The supply problems have been attributed to rising fuel consumption, mainly due to increased mining operations.  

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