The Ministry of Energy kicked off the process for the third oil field licensing round as part of the efforts to increase the country’s oil reserves. Currently, Uganda has approximately 6.5 billion barrels of oil reserves, with at least 1.4 billion estimated to be economically recoverable.
The Energy Ministry’s Permanent Secretary, Irene Bateebe confirmed that several areas in the Albertine Graben have been earmarked for exploration and will be announced for the third competitive bidding.
She revealed that the Cabinet approved the Environment, Social Impact Assessments (ESIAs) for the areas to be opened up. And that the Minister of Energy, Ruth Nankabiwa was tasked to present those reports to parliament for consideration before new exploration are areas announced.
“So our target is that by mid of this year, we should be able to announce our third licensing round, once we have those consultations concluded,” said Bateebe.
In February 2023, the Minister of Energy, Ruth Nankabirwa signed Production Sharing Agreements (PSAs) and granted Exploration licenses to Uganda National Oil Company for the Kasuruban area and DGR Energy Turaco Uganda SMC Limited for the Turaco exploration area.
The signing of the PSAs and award of licenses marked the end of the second competitive bidding process which had begun as early as 2019 but was disrupted by the COVID-19 pandemic outbreak.
Three blocks that had been placed under the second licensing under the second round reverted to the government. It said Ngaji, Avivi, and Omuka attracted less interest among the companies that bided during that licensing round.
Ugandan and DRC Environment activists have in the past opposed attempts to explore for oil in the Ngaji block which is in the vicinity of the Virunga National Park. Virunga National Park is a national park in the Albertine Rift Valley in the eastern part of the Democratic Republic of the Congo.
Virunga is one of the most biologically diverse areas on the planet and home to the world’s critically endangered mountain gorillas. While there is global debate about the e need to shift from fossil-powered development, Uganda has insisted that its oil and gas resources should be explored so that they can help it to transit.
Ruth Nankabirwa last week told journalists that more exploration work would bolster Uganda’s petroleum reserves, sustain petroleum production beyond 25 years, and enhance the commercial feasibility of midstream projects, including the refinery and EACOP.
M/s Oranto Petroleum from Nigeria and M/s Armour Energy from Australia which were selected during the first competitive bidding round were yet to drill any well.
Oranto had its license extended by the Minister at the end of last year. Armour Energy Limited which was licensed to operate in the Kanywataba exploration had by the end of 2023 not drilled any well.
There were reports at the end of 2023 that the company was in receivership. The Minister said the two companies are continuing with seismic data acquisition and interpretation activities and that exploration drilling in was expected this year.
The Ministry of Energy has conducted preliminary petroleum exploration studies in the Moroto-Kadam Basin to evaluate its oil and gas potential. There are plans to initiate similar studies in the Kyoga and Hoima Basins soon. Initial findings suggest potential for commercial oil and gas in Moroto-Kadam.
While French firm TotalEnergies and Chinese firm China National Offshore Oil Corporation (CNOOC) already drilled some wells in the Tilenga and Kingfisher areas. They expect production by 2025.
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