"We categorically put it to them [Tanzania] that as far as we are concerned, the entire lake belongs to Malawi," Patrick Kabambe, principal secretary in the ministry of foreign affairs, said in a statement.
"So our view is that there is no reason to stop the project," he added.
Tanzania has claimed that 50% of the lake which forms its border with Malawi is part of its territory.
Tanzanian Foreign Minister Benard Membe last week told domestic media that "exploration activities in the northeast part of the lake should be shelved to pave way for the ongoing discussions to resolve the crisis".
Malawi, a former British colony, and Tanzania, once ruled by Germany, are due to hold talks on the disputed border in the northern Malawian town of Mzuzu on 20 August.
Kabambe cited an 1890 agreement between the former colonial powers that stipulates the border between the two countries as lying along the Tanzanian shore of the waters of Lake Malawi.
"Our terms are very clear on this, but we will continue to engage with Tanzania as a good neighbour," Kabambe said.
Mozambique also owns part of the lake.
In September last year, the government of Malawi's late president Bingu wa Mutharika awarded a British firm, Surestream Petroleum, a licence to prospect for oil and gas on the giant lake.
The company has been conducting an environmental impact assessment.
The 29 600 square kilometre lake is Africa's third-largest freshwater lake. In Tanzania, the lake is called Lake Nyasa, which is taken from Malawi's colonial name.