Ugandan companies have been urged to join the bidding for oil and gas exploration in the second round of licencing.
The bidders have until the end of June 2021 to submit their bid documents.
Robert Kasande, the permanent secretary at the energy ministry, says Ugandan firms should join the bidding process if they have the capacity.
The four companies shortlisted for the final round of the second competitive oil bidding round are Total E&P Activities Petrolieres, France; DGR Global Limited, Australia; Uganda National Oil Company Limited (UNOC) and a joint venture of PetroAfrik Energy Resources East Africa Ltd, and Niger Delta Petroleum Resources Ltd, Nigeria.
Mr Kasande said the bidders have been provided with all the information about the blocks and the bidding process.
He said the information is aimed at promoting transparency and an equitable bidding process to enable the qualified applicants to prepare technically and commercially responsive bids ahead of the June 30, 2021 submission deadline.
On June 4, the Ministry of Energy and Mineral Development held the bidders conference for the second licensing round to provide clarification on the request for proposal documents, relevant laws, regulations and the model production sharing agreements.
The conference was held both physically and virtually at Lake Victoria Serena Golf Resort Hotel.
Frank Mugisha, acting Commissioner Petroleum Exploration, Development and Production Department, says the five blocks on offer in this second licensing round are Avivi, Omuka, Kasuruban, Turaco and Ngaji in the Albertine graben, all described as highly prospective.
Aviv which is Block 1, is in the northern in Moyo district covering 1,026 sq km. In 2013, despite data showing there is a petroleum system, Neptune Petroleum which was exploring the area hit three dry wells and gave up.
Omuka, which is Block 2 is located in Buliisa district covering 750 sq km, and like Aviv, three dry wells were drilled in the block. Kasurubani which is Block 3 and located in the Buliisa area was drilled by Tullow and oil was found, but the company relinquished the block to the government, with Tullow oil not sure it was as viable as earlier expected. This is also the biggest of the blocks covering 1,285 sq km.
Turaco or Block 4 in the Bundibugyo-Ntoroko area is the smallest of the blocks at 635 sq km, underwent initial explorations and basing on seismic, ground gravity and magnetic data, Heritage Oil commenced drilling and some hydrocarbons were encountered.
After the evaluations of the bids, the government will enter into another round of negotiations with the companies as part of the transparency policies also aimed at avoiding future disagreements.
“The next phase is to negotiate with the companies before the signing of the oil production sharing agreements,” says Robert Kasande, the permanent secretary at the ministry.
Kasande said the objectives of the licensing round include the expansion of the country’s resource base with a view to enhancing the sustainability of oil production and revenue base.
He expressed the Government’s commitment to developing the oil and gas industry in the country in partnership with all the stakeholders in an efficient and effective manner to the benefit of all Ugandans, the East African region and create value to investors.
The second licensing round was launched in May 2019. The country has discovered 6.5 billion barrels of oil of which the recoverable resources are about 1.4 to 1.7 billion barrels.
Over 500 billion cubic feet of gas have also been discovered. The commercial discovery oil took place in 2006.
Three key agreements were signed between the governments of Uganda and Tanzania and the oil companies; Total and CNOOC on April 11, 2021.
These were the Tariff & Transportation Agreement, the Host Government Agreement, as well as the Shareholders’ Agreement.
The agreements present opportunities for key projects to take off over the next four years such as building the East African crude oil pipeline, the oil refinery in Hoima and the Tilenga project for oil fields and processing facilities. These projects are worth over $15b (sh53 trillion).