Ministry Clarifies Oranto Petroleum’s License Status for Oil Exploration

The Ministry of Energy and Mineral Development refutes claims that the license for oil exploration in the Albertine Graben held by Nigerian oil firm Oranto Petroleum Limited (OPL) has expired. Some media outlets suggested that the expiration of OPL’s license posed a threat to the oil and gas sector.

OPL was initially granted a two-year license for oil exploration in the Ngasa Shallow and Deep Play Areas in Hoima and Kikuube districts in 2017. The license was extended to 2021 but was disrupted by the Covid-19 pandemic, leading OPL to request compensation for the lost days. The government approved an extension from December 30, 2021, to December 29, 2023.

On July 25, 2023, OPL requested a three-year license extension and renegotiation of the terms of the Production Sharing Agreement (PSA) for the Ngasa Block, including royalties, cost recovery, and profit sharing. In response on September 22, 2023, the Minister clarified that the law allows for a maximum two-year extension, contingent on the PSA amendment for the Ngasa Block. The Minister also noted that OPL’s justification for the three-year extension was insufficient and instructed the company to provide detailed justification to the Ministry by October 14, 2023. As of October 21, 2023, OPL had not responded to these requests.

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