Second oil licensing round on course, says Energy ministry

Wednesday November 20 2019

The next round of oil exploration is ex

The next round of oil exploration is expected to increase the current oil stocks. FILE PHOTO  

By Eronie Kamukama

The oil and gas sector is slowly responding to the second licensing round launched in May at the East African Petroleum conference in Mombasa, Kenya.
More than a week ago, the Ministry of Energy ended its promotions in South Africa, US, UK and UAE.
“So far, we have three companies that have paid $20,000 as application fee but of course more than 20 companies have expressed interest. These companies have asked that we extend the prequalification period from November 22 so we have extended to December 31 to allow the companies to prepare very good applications,” Mr Frank Mugisha, the Ministry of Energy assistant commissioner and licensing manager for upstream petroleum management, said during a symposium held by Civil Society Coalition on Oil and Gas on petroleum development, people and biodiversity conservation.
The ministry offered potential investors five blocks across the Albertine Graben.
The areas that are productive and up for exploration include Avivi, which covers 1025km, Omuka, which covers 750km, Kasuruban (1285km), Turaco which covers 637km and Ngaji, covering 1230km.
An analysis of the blocks indicates Uganda could drill more than three billion barrels. A potential recoverable oil of 20 per cent could translate to 600 million barrels of oil.
The Ministry said the licensing round has encountered challenges.
“Most potential investors ask when the infrastructure we talk about will happen and this will happen after the final investment decision. So the delay has some negative effects but the good news is it is expected in the first quarter of 2020,” Mr Mugisha said, adding: “Competition from other African countries that are also promoting licensing rounds such as Gabon, Angola, Ghana, Mauritania, Namibia and Mozambique. They have access to the sea meaning that their reserves have easy access to external markets which is not the case for Uganda. ”
Ugandan companies fall short of technical capacity but are expected to partner with competent international companies.
Successful companies will be announced at the end of January 2020. This will pave way for the bidding process in February. June 2020 will mark the end of submission of bids and thereafter, the negotiation process with successful bidders will follow. License are to be awarded by end of December 2020.
The licensing round is propelled by the need to establish additional petroleum resources and ensure sustainable oil production. More so, this is to ensure the infrastructure including the refinery and export pipeline have resources to sustain their economic viability.

Self-service point

Successful companies will be announced at the end of January 2020. This will pave way for the bidding process in February. June 2020 will mark the end of submission of bids and thereafter, the negotiation process with successful bidders will follow. Licences will be awarded by December 2020. The licensing round is propelled by the need to establish additional petroleum resources and ensure sustainable oil production.

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