Uganda announces first petroleum exploration licensing round

Gov’t to issue production licenses to Tullow and Total

The Ugandan government has announced the country’s first open competitive licensing round for petroleum exploration.

The licensing round will cover six blocks in the Albertine Graben which is a proven prospective sedimentary basin. The government is offering 2,938 Km2 of high potential acreage for licensing

“We have an estimated 6.5 billion barrels of in place petroleum resources from exploration work in less than 40% in the Albertine Graben. However, less than 10% of the Albertine Graben is currently licensed and the six blocks targeted for this maiden licensing round have good data coverage.” Eng. Irene Muloni, Minister of Energy and Mineral Development said in an interview with this website

The six blocks are; Ngassa (410 Km2) in Hoima District, Taitaia and Karuka (565 Km2) in Buliisa District, Ngaji (895 Km2), Rukungiri and Kanungu Districts, Mvule (344 Km2) in Moyo and Yumbe Districts together with Turaco (425 Km2) and Kanywantaba (344 Km2) in Ntoroko District.

These blocks have both seismic and well data which were acquired by oil companies previously licensed in these areas. Stratigraphic Licensing will be applicable to some of these blocks.

Uganda has undertaken resource and risk assessment of the areas proposed for licensing, developed a data room and is making available data packages to prospective investors in preparation for this licensing round.

 Uganda’s first licensing round is guided by the National Oil and Gas Policy for Uganda (2008) and the Petroleum (Exploration, Development and Production) Act 2013. The announcement follows approval of Cabinet and submission of a report on the Licensing round to Parliament.

Muloni said the government “in line with the guiding principles of our National Oil and Gas Policy” is committed to a transparent process developing Uganda’s oil and gas sector.

The minister stated the delay in the process has been due to the fact that they wanted “to put in place the required legal, regulatory and institutional framework to ensure an open, efficient and competitive licensing process.”

 Uganda’s Ministry of Energy and Mineral Development will publish a Request for Qualification (RFQ) for the First Licensing Round for Petroleum Exploration in today.

The qualified firms from this RFQ will be issued a detailed request for bids together with the Modal Production Sharing Agreement (PSA) for the specific blocks. Companies submitting the best evaluated bid for each of the blocks will proceed to negotiations with Government prior to signing production sharing agreements. The licensing round is expected to conclude with the award of licenses by the end of 2015.

 The Minister said the main objectives of implementing the licensing round are to offer exploration and production investment opportunities in the country’s oil and gas sector.

The other objectives are to establish and increase the country’s resource base, enhance sustainability of petroleum production and thus contribute to the country’s economy.

 More details on the blocks will be released during the upcoming 7th East African Petroleum Conference and Exhibition slated for next week in Kigali, Rwanda.

In a related development, the government has said it will soon grant production licenses to oil giants Tullow and Total thereby paving way for the duo to extract and refine the East African nation’s oil

Speaking to this website  on the sidelines of the public dialogue on oil in the Ugandan capital Kampala this week, the country’s State Minister for Energy in charge of Mineral Resources, Peter Lokeris said within a month or two the two companies will be issued licenses.

Currently, Tullow Uganda Operations Pty Limited and Total E&P Uganda are just licensed for oil exploration in Albertine Graben. Its only China National Offshore Oil Corporation (CNOOC) Uganda Limited that licensed for both exploration and production but the chinese company’s production operations are limited to one oil well.

Twenty one oil and gas discoveries have been made in Uganda to date, four of which were relinquished to government. Appraisal of 17 of the 21 discoveries has been completed. One production license was issued over the Kingfisher field while discussions on applications for production licenses over 15 fields are in advanced stages.

The Government of Uganda and the companies currently licensed to undertake Petroleum exploration, development and production in the country has entered into a Memorandum of Understanding (MoU) for commercialization of the discovered resources. This Memorandum of Understanding includes development of a 60,000 barrels per day refinery, use of crude oil to generate electricity and export of crude oil.

Uganda’s refinery project is being developed on a public private partnership basis.

Following a competitive process, RT Global Resources led consortium from Russia has been selected as the preferred bidder to be lead investor for Uganda’s Refinery Project.

The acquisition of the required land for the development is in final stages. Plans to develop other supportive infrastructure on a national and regional level are also underway. Commercial production is expected to commence in 2018.

 

Oil Drilling in the Albertine Graben

Oil Drilling in the Albertine Graben

Albertine Region 171

Albertine Region 187