Uganda Shortlists Four Firms for Oil Exploration Deals
June 03 2021 - 12:22PM
Dow Jones News
By Nicholas Bariyo
KAMPALA, Uganda--Uganda has selected four companies for the
final round of its second-ever competitive oil bidding round
involving five oil blocks along its western border with Congo,
where it has already discovered huge commercial crude deposits, the
energy and minerals ministry said Thursday.
The four companies include Total E&P, a unit of France's
Total SE, Australia's DGR Global Ltd., Nigeria's PetrolAfrik Energy
Resources and the state-run National Oil Co. The development caps
two years of a selection process amid the country's continuing
efforts to attract investors to its nascent oil industry. At least
six firms have expressed interest in the bidding round,
underscoring renewed interest in the sector amid recovering global
crude prices, according to Robert Kasande, the permanent secretary
at the energy and minerals ministry.
"The next phase is to negotiate with the companies, before the
signing of the oil production sharing agreements," Mr. Kasande
said.
Uganda launched its first oil block licensing round in 2015,
resulting in the awarding of exploration licenses to Australia's
Armour Energy Ltd., and Nigeria's Oranto Petroleum.
Previously, Uganda handed out blocks on a first-come,
first-served basis. Total and China's Cnooc Ltd. currently own
licenses for the existing crude fields, believed to contain as much
as 6.5 billion barrels of crude.
Over the past five years, Total and Cnooc have been in the
process of developing the oil fields, but a litany of disruptions,
ranging from tax disputes to disagreements over development plans
have delayed commercial output.
Last month, Total signed a $3.5 billion export pipeline deal
with Uganda and Tanzania, unblocking a major hurdle for the
project. As much as $10 billion is required to develop the 230,000
barrels-a-day oil project and build a 900-mile export pipeline to
the Tanzanian port of Tanga, according to Total. Total expects to
start commercial oil production from the fields in early 2025.
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com
(END) Dow Jones Newswires
June 03, 2021 12:13 ET (16:13 GMT)
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