By Nicholas Bariyo
KAMPALA, Uganda--Uganda's energy and minerals ministry said
Wednesday that oil companies have completed appraisal activities
for at least 11 oil fields out of the 21 discoveries, bringing the
east African nation closer to the start of commercial crude
production.
The ministry said that investments in oil exploration and
appraisal activities increased to $2.4 billion, higher than the
previous estimate of $2 billion, as companies step up efforts to
develop the vast oil fields.
The completion of appraisal activities is a major step forward
for the country's fledging oil sector, whose development has been
held back for years amid a range of hurdles, from tax disputes with
oil companies to disagreements over oil development plans.
"Appraisal of six other discoveries is ongoing and expected to
be concluded during 2014," the ministry said in a news release.
"Exploitation of these resources will contribute to the takeoff and
social economic transformation of the country."
At least four of the discoveries will be available during the
next licensing round through an open competitive bidding process,
by the end of the year, according to Peter Lokeris, Uganda's junior
energy and minerals minister.
A production license for one of the oil fields was granted to
Cnooc Ltd. last year, while applications for 10 others are being
considered, according to Mr. Lokeris. U.K.-based Tullow Oil PLC has
applied for at least eight licenses while France's Total SA is
awaiting approval for two applications.
Oil companies will build a 1,200-kilometer export pipeline from
the landlocked nation to the East African coast. The pipeline is
expected to eventually be linked with oil fields in South Sudan to
give the world's youngest nation a second export route for its
crude.
Currently, South Sudan relies on pipelines that straddle through
its former civil war foe Sudan to export its crude.
With discoveries of at least 3.5 billion barrels of crude,
Uganda has Sub Saharan Africa's fourth-largest crude reserves,
behind Nigeria, Angola and South Sudan.
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com
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