What you need to know:
- CNOOC and UNOC will submit the joint application that will include, “discussions expected to culminate in the award of an exploration license.
Uganda National Oil Company (UNOC) will make a joint application for a license to undertake exploration of possible oil reserves in the Pelican – Crane offshore block at the southern tip of Lake Albert in Ntoroko District.
UNOC signed a Joint Application Agreement with China National Offshore Oil Company (CNOOC) towards the end of last week.
The two companies will submit the joint application to the Ministry of Energy that will include, “discussions expected to culminate into the award of an exploration license for the block.”
“The leaders of the two companies earlier today signed documents regarding the joint application in Kampala,” UNOC said in a statement, which noted that the Pelican-Crane block has a high potential and is one of the biggest exploration blocks in the Albertine Graben.
Mr Peter Muliisa, the UNOC corporate affairs manager, said at the weekend the joint agreement is an interim structure and a guiding framework for UNOC and CNOOC on how to file the application.
“Once we file the application, we shall negotiate the production sharing agreement with government and sign it so that it becomes the agreement that regulates our conduct,” Mr Muliisa said, noting that UNOC will represent government with a 20 percent of state participation, and a further commercial participating interest of 10 percent for UNOC, with an option to buy a further 10 percent.
First drilling offshore prospects for the Pelican and Crane oil block started almost a decade ago, according to documents from Heritage Oil, one of the companies that had acquired licences for oil exploration in the vast Albertine Graben before exiting in 2010.
An opportunity for the two oil companies to jointly apply for an exploration license emerged in 2018, which followed the signing of a memorandum of understanding in Beijing, China.
The memorandum of understanding was signed by Dr Josephine Wapakabulo, the former UNOC boss and Mr Fang Zhi, the CNOOC chairman.
It indicated that UNOC and CNOOC would work together to develop a block in the Albertine Graben to ensure that more oil is discovered to support the projected production profile, now under development.
UNOC also wants to create an avenue to grow its exploration capabilities as well as team up with CNOOC “to grow their partnership into other operations in and outside of Uganda,” UNOC said.
Other exploration activities
Uganda launched the second licensing round for petroleum exploration at the ninth East African Petroleum Conference and Exhibition in Mombasa, Kenya during May 2019.
This round covers five blocks in the Albertine Graben, among which include Block 01 Avivi Area covering 1,026 kilometres, Block 02 Omuka covering 750 kilometres, Kasuruban covering 285 kilometres, Block 04 Turaco covering 637 kilometres and Block 05 Ngaji covering 1230 kilometres.
Most of these blocks are situated at the northern tip of Lake Albert across Nebbi, Nwoya, Masindi and Kiryandongo districts.
Mr Ernest Rubondo, the Petroleum Authority of Uganda chief executive officer, noted that only 15 percent of the Albertine Graben is currently under licence, noting that current oil resource volumes are expected to increase if the ongoing exploration works by Oranto Petroleum and Armour Energy Uganda Limited in Ngassa and Kanywataba are successful.
According to the Peroleum Authority of Uganda, the Ngassa exploration block is located in Kikuube and Hoima districts, and were initially part of the exploration areas licensed to Tullow acquired between 2003 and 2008.
The license for the Kanywatabe exploration are is located in Ntoroko District.