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Troubled water: Oil search fuels tension over Lake Malawi

From Robyn Curnow and Victoria Eastwood, CNN
November 14, 2012 -- Updated 1318 GMT (2118 HKT)
STORY HIGHLIGHTS
  • British oil company given contract to search for oil beneath Lake Malawi
  • Lake provides livelihood for fishermen and is environmentally valuable
  • Prospect of oil in the lake has set stage for dispute between Malawi and Tanzania
  • Oil find could be significant for Malawi economy

Lake Malawi, Malawi (CNN) -- Following recent oil finds in Uganda and Kenya, Malawi hopes to be the next East African country to strike black gold.

Malawi has awarded British oil company Surestream Petroleum the only contract to search for oil beneath Lake Malawi, the body of water that borders Malawi, Mozambiue and Tanzania.

"We feel this area has a very high potential in the order of billions of dollars of recoverable oil," says Keith Robinson, of Surestream.

"In a country the size of Malawi -- it is not a large country, it does not have a large GDP -- the income that could be generated for Malawi financially would be very, very significant," he adds. "We think it could be a serious game changer for this country."

Lake Malawi: Click to expand  Lake Malawi: Click to expand
Lake Malawi: Click to expandLake Malawi: Click to expand

But some fear that if oil is found, it could turn out to be more of a curse than a blessing.

See also: Can Kenya avoid resource curse?

Lake Malawi provides a livelihood for local fishermen. It's also a UNESCO World Heritage site, invaluable for studying the evolution of fish, according to UNESCO.

Global oil production, 2011. Click to expand.  Global oil production, 2011. Click to expand.
Global oil production, 2011. Click to expand.Global oil production, 2011. Click to expand.

Since the contract was won a year ago Surestream has been conducting an environmental survey to establish what impact drilling in this freshwater lake could have. The findings will be published shortly.

"Once all the environmental work is all understood, and it is agreed and accepted, we will then go to the lake and start the exploration process in earnest," says Robinson. "That process will take a number of years."

Malawi's economy
GDP (purchasing power parity): $14.08 billion. World rank: 140
GDP per capita (PPP):
$900
GDP by sector
Agriculture: 29.9%
Industry: 16.6%
Services: 53.5%

Source: CIA World Factbook, 2011 estimates

The prospect of drilling is a cause of concern for some of the people who earn a living from the lake.

Michael Kanjira has been fishing on the lake since he was 10. He fears the search for oil may prevent him from plying his trade. "It will be a big risk for us," he says. "Our children are going to school through this money we get from fishing."

Max Ngochera is a marine biologist. He says that if the lake becomes polluted with oil, a clean-up operation would be costly and any contaminant would take up to 700 years to drain naturally through the only river outlet.

"It is the lake with the most abundant fish species in the world, so it is very unique, it is very clear. It is not polluted yet so it is very unique in that sense," says Ngochera.

He fears an oil spill could devastate this fragile ecosystem. "It would take lot of time until it either flushed itself out or the pollutants spread out -- so it would be a huge task to bring the lake back to its pristine levels," he says.

Oil rush could result in a border war

See also: Rangers struggle to save Lake Malawi fish

Surestream CEO Chris Pitman says it is important to allay people's fears. "We have to explain to them that even now in national parks in Africa -- in Uganda for instance -- they're producing oil in national parks and that it can be done in an environmentally sensitive way," he says.

To further complicate matters, the prospect of oil in the lake has set the stage for a dispute between Malawi and Tanzania over who owns its waters, and its riches. The dispute has now been referred to the International Court of Justice.

See also: Oil rush could bring border war

Pitman sees it as an example of the "resource curse" that has affected many African nations with abundant natural resources.

"As soon as you find that there's a possibility of natural minerals, natural resources, hydrocarbons, then clearly old disputes or potential disputes come to the fore again," he says.

He adds that border tension means Surestream will now be restricting where they look for oil.

We don't want to see Malawi and Tanzania get to the point where they are fighting for Lake Malawi's oil.
Reinford Mwangonde, Citizens for Justice

Reinford Mwangonde, of environmental and social advocacy Citizens for Justice, agrees that oil is behind the tension. "We don't want to see Malawi and Tanzania get to the point where they are fighting for Lake Malawi's oil," he adds.

The Malawian government admits that this border dispute is a source of concern, but its economy needs oil, to diversify away from tobacco.

While oil could revive the country's economy, Mwangonde doubts that oil wealth will trickle down to the locals. "A lot of the people who live around the lake are fisherman, they have no skills at all to work in an oil industry," he says.

It's a complaint common to many resource-rich African nations: ordinary people don't benefit from that wealth. But Pitman hopes Malawi's new president Joyce Banda can do things differently.

"I think Joyce Banda has (an) amazing opportunity now to open it up, to allow this to be done in a more accountable way so that there isn't the opaqueness, there's more transparency and we can avoid the spiraling inequalities which occur through oil wealth," he said.

If generations to come are to benefit from the lake -- from its food and potentially its oil -- then Malawi's government faces a challenge of leadership and resource management. Because to fail, could turn the lake from an asset to a liability.

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