Australian firm set to invest in Uganda Oil exploration

By Ambrose Gahene

Austrian oil exploration and production firm, Armour Energy Limited (AEL) is set to invest in the Uganda oil exploration and production. Minister of Energy and Mineral Development Irene Muloni confirmed that; Government has signed a Production Sharing Agreement {PSA} and issued a License; for Petroleum Exploration, Development and Production over the Kanywataba Contract Area with the Australian firm.

She was speaking last Thursday during a Ceremony held at Amber House in Kampala. “This is the first Production Sharing Agreement to be signed in line with Section 58 of the Petroleum Exploration, Development and Production Act 2013, the Legal regime under which I announced the First Competitive Licensing Round during February 2015.”

The exploration license has acreage of 344 sq. Kilometer for four years split into two periods of two years each. The PSA also includes an Advisory Committee chaired by the Petroleum Authority of Uganda, and consisting of representatives from Government and the Licensee to review and approve all annual exploration work programmes, budgets and production forecasts.

Minister of Energy and Mineral Development Irene Muloni {right} displays the Oil exploration agreement with Australian Armour Energy Ltd representative

Minister Muloni further said that a signature Bonus together with Research and Training fees, and Annual Acreage Rental fees for the First Exploration Period amounting to US$ 316,000 have been paid to the Uganda Petroleum Fund. Robert Kasande, Ag. 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 US$ 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  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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