Oil & gas

Govt Awards Oil Exploration Deal to Australian Company

Government of Uganda has Thursday signed a Production Sharing Agreement (PSA) and issued a License for Petroleum Exploration, Development and Production over the Kanywataba Contract Area with Armour Energy Limited (AEL) from Australia.

Speaking during the Ceremony held at Amber House, Eng. Irene Muloni, Minister of Energy and Mineral Development said that the Production Sharing Agreement was the first to be signed in line with Section 58 of the Petroleum Exploration, Development and Production Act 2013, the Legal regime under which she announced the First Competitive Licensing Round during February 2015.

“We have awarded AEL an exploration license with an acreage of 344 sq. Kilometer for four years split into two periods of two years each and a minimum work programme which includes acquisition of seismic data and drilling of at least one well,” Muloni said.

She continued: “In addition, An Advisory Committee chaired by the Petroleum Authority of Uganda, and consisting of representatives from Government and the Licensee has been set to review and approve all annual exploration work programmes, budgets and production forecasts.”

Robert Kasande, acting Permanent Secretary added that one of the major achievements from this licensing round was the development of a state of the art data room which remains open to the industry to view and purchase data, and will also be used for future licensing rounds.

“The Ministry was able to generate $2.4 million from the sale of data to bidders which was paid to the Uganda Petroleum Fund,” he said.

The award was cleared by Cabinet and the Ministries of Finance, Planning and Economic Development together with that of Justice and Constitutional Affairs.

The Minister also said that on Friday 8th September 2017, Cabinet approved the award of two licenses in the Ngassa block and that the agreements would also be signed in a few weeks’ time.

Uganda’s first licensing round covered six blocks with a total acreage of 2,674 Km2 in the Albertine Graben, Uganda’s most prospective sedimentary basin.

Out of the nineteen (19) applicants at the Request for Qualification Stage, sixteen proceeded to the Request for Proposal stage and four emerged successful and proceeded to the negotiations stage.

This first licensing round was undertaken in line with the National Oil and Gas Policy for Uganda (2008) and in accordance with the Petroleum (Exploration, Development and Production) Act 2013.


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