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Uganda Selected Companies for Oil Exploration Deals

Uganda has selected companies for the final round of its second-ever competitive oil bidding round involving five oil blocks along its western border with Congo, where it has already discovered huge commercial crude deposits. The four companies include Total E&P, a unit of France’s Total SE, Australia’s DGR Global Ltd., Nigeria’s PetrolAfrik Energy Resources and the state-run National Oil Co.

The development caps two years of a selection process amid the country’s continuing efforts to attract investors to its nascent oil industry.  According to Robert Kasande, the permanent secretary at the energy and minerals ministry at least six firms have expressed interest in the bidding round, underscoring renewed interest in the sector amid recovering global crude prices.

Uganda Selected Companies for Oil Exploration DealsMr Kasande said that the next phase is to negotiate with the companies, before the signing of the oil production sharing agreements. Uganda launched its first oil block licensing round in 2015, resulting in the awarding of exploration licenses to Australia’s Armour Energy Ltd., and Nigeria’s Oranto Petroleum.Uganda handed out blocks on a first-come, first-served basis. Total and China’s Cnooc Ltd. currently own licenses for the existing crude fields, believed to contain as much as 6.5 billion barrels of crude.

Total and Cnooc have been in the process of expanding the oil fields, but a litany of disturbances, varying from tax disputes to disagreements over development plans have delayed commercial output.Total signed a $3.5 billion export pipeline deal with the company and Tanzania, unblocking a major hurdle for the project. Nearly $10 billion is required to develop the 230,000 barrels-a-day oil project and build a 900-mile export pipeline to the Tanzanian port of Tanga.

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