20110408
reuters

LUSAKA (Reuters) - Zambia has granted London-listed Frontier Resources International a licence to explore for oil in the southern African nation, bringing to three the number of companies so far licenced.

Zambia does not produce oil, but the government says soil samples sent to European laboratories have shown good traces of oil, particularly in areas bordering oil-producing Angola.

Frontier said in a statement on Friday that it had completed the licencing process after the government in February awarded it an exploration block southwest of Lusaka.

"This area has had no previous hydrocarbon exploration but may form part of the southwestern extension of the productive East African Rift system," it said.

The exploration licence is for an initial four-year period and commenced on March 25, Frontier said.

Frontier's Zambian exploration licence was its first in southern Africa where the company plans to pursue additional opportunities, it said.

Zambia last year started issuing oil and gas exploration licences to local and foreign companies in a bid to become an energy producer, after it passed a law on new licensing fees, Mines Minister Maxwell Mwale said.

Oil and gas explorer Exile Resources Inc said in February it had received an exploration licence for a project in northeastern Zambia after another Zambian firm was licenced.