By Nicholas Bariyo

Seventeen oil companies, including South Africa's petrochemical company Sasol Ltd. (SSL) and India's ONGC Videsh, have been selected for the second round of the country's first competitive oil bidding program for at least six blocks, which will be awarded this year, the energy and minerals ministry said Wednesday.

The 17 were selected from a list of 19 companies that expressed an interest in the first bidding round, which was announced in February, Fred Kabagambe-Kaliisa, the ministry's permanent secretary said in a statement.

The contracts for the blocks will be awarded this year with the companies going forward from the second round to be announced in August.

Uganda aims to attract more investors in its fledging oil industry. Oil companies have discovered at least 6.5 billion barrels of crude oil, from about 20% of its oil region, rendering the country's crude fields the third largest by reserves in sub-Saharan Africa after Nigeria and Angola.

"The six blocks on offer presents great opportunity to discover additional resources that will enhance the country's sustainability of oil and gas production and commercialization." Mr. Kabagambe-Kaliisa said.

Other bidders to go to the second round include U.K.'s Tullow Oil PLC (TLW.LN), Petoil Ltd. of Turkey, Rift Energy Corp and Glint Energy LLC from the U.S., Russia's Africa Global Resources and China's Brightoil Petroleum.

The blocks on offer lie along Uganda's western border with Congo and include at least four lucrative discoveries, relinquished by the existing oil companies this year.

Last week, Uganda resolved a long standing tax dispute with Tullow and analysts believe the development of the sector will now move faster after years of delays.

Tullow along with China's Cnooc Ltd. (0883.HK) and France's Total SA (TOT) are already developing the country's confirmed reserves, where they expect to deliver around 40,000 barrels-a-day of initial crude in 2018. The country expects to reach peak output of around 220,000 barrels a day by 2022.

The East African region has been a hotspot for oil and natural gas exploration following a flurry of oil and gas discoveries in Uganda, Kenya, Tanzania and Mozambique.

Write to Nicholas Bariyo at nicholas.bariyo@wsj.com

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