Zambia awards exploration licenses for 11 blocks

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Nov. 19 -- Zambia is set to award exploration licenses for 11 oil and gas blocks in the northwest, east, and west of the country, according to Maxwell Mwale, minister of mines and mineral development.

“Successful bidders should commence petroleum exploration activities immediately,” Mwale said, adding that seven companies—international and local—have been selected as successful bidders for the blocks.

Mwale identified these bidders as Exile Resources Inc. (Block 26), Glint Energy LLC (Blocks 2, 3, and 4), GP Petroleum (Block 22), and Petrodel Resources Ltd. (Block 17), along with three unnamed local companies.

In June, Zambia issued an international tender for 23 blocks near the border with Angola. Bidding for the remaining 12 blocks will close in June 2010. Bidders are required to pay a nonrefundable fee of $10,000/block for the data packages.

Meanwhile, earlier this week, Zambia invited bids for the supply of 1.4 million tonnes of oil over a 2-year period ahead of the expiry next month of a deal with Kuwait's International Petroleum Group.

Zambia Public Procurement Authority spokeswoman Hazel Zulu said Dec. 18 would be the last date to receive sealed bids, and that the winner should supply the first cargo by Jan. 1, 2010, through Tanzania’s Port of Dar-es-Saalam.

The tender for crude supplies came as Zambia’s sole refinery, the 24,000-b/d Indeni Petroleum refinery, which was shut down for maintenance on Oct. 15 after a fault, has resumed production.

Owing to the malfunction of a key component at Indeni, Zambia has been experiencing acute shortages of both diesel and gasoline, threatening to bring down the economy of Africa's largest copper producer.

Zambia's government bought Total SA's 50% stake in the Indeni plant for $5.5 million in early November. Recent market estimates indicate that the refinery needs $65 million for recapitalization.

Contact Eric Watkins at hippalus@yahoo.com.

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