Uganda to award three exploration licences in June

Uganda will issue three exploration licences and sign Production Sharing Agreements (PSAs) with three oil companies that made it to the last round of the first competitive licensing process, opened in February 2015.

The development was announced by energy minister, Irene Muloni, at the government Media Center on Wednesday. Ms Muloni said “approvals by cabinet to grant the exploration licences have already been secured.”

The exploration licences and PSAs are for three oil blocks; Kanywantaba in Ntoroko district, Turaco in Ntoroko, and Ngassa in Hoima. The companies are Armour Energy Limited, which will be issued a licence for Kanywantaba, WalterSmithPetroman Oil Limited for Turaco, and Oranto Petroleum for Ngassa.

The three were the successful bidders from a pool of 17 mostly independent oil exploration firms that initially expressed interest in the six oil blocks available during the bidding process.

Three oil companies – France’s Total E&P, China’s Cnooc, and Britain’s Tullow – are already licenced to operate in Uganda.

That leaves three oil blocks for which government for which has to find companies to explore. They are Taitai and Karuka in Buliisa district, Mvule in Moyo/Yumbe and Ngaji block between Rukungiri and Kanungu.

The Ngaji block, which covers part of Lake Edward and Queen Elizabeth National Park, also said to be part of the same ecosystem as Virunga – Africa’s oldest national park and a UNESCO World Heritage site, was overlooked by the bidding companies due to an uproar by conservationists.

The delay to grant the exploration licences was due to protracted negotiations over the companies’ work programmes and their technical and financial capacities.

The Petroleum Authority has been negotiating the licences and is mandated by the Act to monitor and regulate exploration, development and production of petroleum in Uganda. The body also advises the minister in the negotiation of petroleum agreements and in the granting and revocation of licences.