10 May 2019

Uganda: Government Announces Five New Blocks for Licensing

Photo: Benjamin Jumbe /Daily Monitor
(file photo).

Minister of Energy and Mineral Development, Irene Muloni has announced the second round of competitive bidding for five new blocks in the Albertine Graben in Uganda.

Muloni made the announcement on Wednesday 9th May, 2019 during the 9th East African Petroleum Conference and Exhibition (EAPCE '19) at Pride Inn, Mombasa, Kenya.

The five blocks are; Avivi (1,026 Sq. Km) in Arua district; Omuka (750 Sq. Km) in Nebbi district, Kasuruban (1,285 Sq. Km) in Buliisa/Pakwach districts, Turaco (637 Sq. Km) in Ntoroko district, and Ngaji (1,230 Sq. Km) in Kanungu/Rukungiri districts.

According to a statement on the Ministry's official Facebook page, the Minister said they were expecting many potential exploration companies for the blocks given that the current price of crude oil is high and very attractive for investment. She said the cost of finding oil in Uganda has been very low at less than a dollar per barrel as compared to the world average of two dollars per barrel.

"I am very pleased to announce that my five new brides are ready. They are very attractive and easy to find. I invite investors to come and take them up," Muloni said.

Muloni boasted of a very conducive investment climate in Uganda singling out peace and security, infrastructure development, tax incentives and good human resource made of a youthful and educated population.

The Ministry will consequently issue a Request for Qualification (RFQ) inviting interested firms and/or consortia to submit applications within a period of 6 months.

"Upon evaluation of the applications, the successful firms/consortia will be issued with bidding documents comprising the model production sharing agreement and data sale regulations among others," according to the Minister's statement.

The bidding process will take five months and result in the negotiations and signing of production sharing agreements between Government and the successful bidders. The licensing round is expected to be concluded with the award of Petroleum Exploration Licenses to successful firms by December 2020.

Uganda launched its first oil block auction in 2015, covering six exploration areas measuring 2,674 square kilometres. Prior to that, the country handed out blocks on a first-come, first-served basis.

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