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Home » News » Uganda Considering Second Exploration Licensing Round for ‘Ignored’ Oil blocks—Papers

Uganda Considering Second Exploration Licensing Round for ‘Ignored’ Oil blocks—Papers

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Uganda government is considering a fresh licensing round for three oil blocks in the Albertine Graben that were not taken up during the first licencing round, Daily Monitor newspaper has reported.

One of the blocks measuring about  344 Km2 Mvule block, according to the ministry’s spokesperson Ibrahim Kasita, received only one bid from US-based Glint Energy Limited, but the bid “was not evaluated as the company did not meet pre-requisite requirements.”

Glint was among the seven oil firms out of the 17 shortlisted that submitted bids for the six prospective oil blocks.

“The company did not acquire the existing data to undertake technical assessment of the block. Therefore, it did not proceed to the negotiation stage,”  Kasita was quoted by the newspaper.

Few bidders

Only one bid was received for the Karuka-Taitai block, submitted by Australia’s Swala Energy.

“However, the company’s technical and financial proposal was found inadequate,” he added.

“In addition, the company is currently under ‘Company Administration by a third Party’ in Australia.”

Towards negotiations, the firm announced late in June that it had “placed itself in voluntary administration as part of the restructuring plan with the aim of emerging from administration with a streamlined corporate structure better adapted to the current exploration market.”

No firm bided for the Ngaji block, which covers half of Lake Edward and a part of Queen Elizabeth National Park, and also forms part of the same ecosystem as Virunga – Africa’s oldest national park and a Unesco World Heritage site.

Only three blocks, Kanywantaba block (344 Km2) in Ntoroko, Turaco (425 Km2) in Ntoroko, and Ngassa (410 Km2) in Hoima District were snapped up by four firms, Australia’s Armour Energy Limited, Nigeria’s WalterSmithPetroman Oil Limited and Oranto Petroleum & Niger Delta Petroleum Resources, respectively.

Officials explain

 Former Director of the Petroleum Directorate Ernest Rubondo, in August said they would conclude signing the Production Sharing Agreements (PSAs) with the quartet before the end of month but the timeline has been extended to “before end of 2016.”

The licensing round, the first where government invited interested firms to enter the sector through the bidding process, was panned as lackluster after it attracted only small and medium exploration firms.

Oil technocrats, however, defended that they got a blend of applicants, with two large companies (with market capitalisation of over $25 billion), five medium companies (market cap between $5 and $25 billion) and ten small companies with (market cap of less than $5 billion).

The UK-based Global Witness, a natural resources campaign NGO, profiled the four firms that the government is negotiating with.

Armour Energy Limited – Kanywantaba block

The Australian third party company with holdings in Australia’s oil and gas sector, according to Global Witness, retained the services of Tom Buringuriza, the former deputy executive director of the Uganda Investment Authority (UIA) between 2008 and 2013, as a points man.

He currently runs a consultancy firm promoting Public Private Partnerships concepts for skills development in the oil sector.

Source: Daily Monitor