Vanoil Energy has completed a two-month extension of its technical evaluation agreement with the government, a move that provides the company with exclusive rights to benefit from the production of oil in the Kivu Graben which is suspected to hold oil deposits.
This development puts the oil prospector at a step where they can negotiate for a product sharing deal with the government.
Based in Canada, Vanoil is an energy company with oil and gas assets in Kenya and Rwanda. The company has held exclusive exploration rights to the 1,631 square kilometre East Kivu Graben in north-western Rwanda since 2010.
The government was optimistic that oil discoveries would be made in the future and it granted Vanoil the right to negotiate for a production sharing contract once oil discoveries are made. All exploration costs are covered by Vanoil Energy.
"The technical evaluation agreement was extended to allow Vanoil conclude a long-term production sharing contract with the government," Caroline Kayonga, the permanent secretary in the Ministry of Natural Resources, said yesterday.
"This means that the government is giving Vanoil first priority to negotiate for the particular area they are exploring. We are waiting for the final report of the 2D seismic investigation at a later date."
The technology provides analytical data to show whether the geological structure of Lake Kivu contains oil reserves below its seabed. The Kivu Graben area is part of the great East African Rift Valley on the southern extension of the Albertine Graben in Uganda, where major oil discoveries have already been made, heightening expectations of oil in the region. Rwanda is expected to exhibit her oil and gas potential during the Sixth East African Petroleum Conference and Exhibition that will be hosted in Arusha, Tanzania from February 6 to 8.