Cape Town: Minister Muloni Invites Bidders for Uganda’s New Oil Blocs

Energy Minister Hon Irene Muloni has invited companies to bid for the second licensing round of Uganda’s new oil blocks.

The minister, speaking in South Africa, called for companies to place bids for the 5 highly prospective blocks of Avivi, Omuka, Kasurubani, Turaco and Ngaji in the ongoing second licensing round which was announced in May, 2019.

This was during the Uganda National Showcase, which was held on the sidelines of the Africa Oil Week in Cape Town.

The deadline for responding the Request for Qualification for the Second Licensing Round, she said, is on 31st December, 2019.

“The entire Albertine basin is de-risked, some of these five blocks neighbor the other development projects (Tilenga and Kingfisher), and the support infrastructure, making them highly lucrative” she said.

“All of the five blocks have good quality seismic and other data.”

Uganda is looking to increase the country’s resources with, 90% of the Albertine basin currently unlicensed.

Preliminary exploration work in other basins is also ongoing, and an oil seep has been encountered by the Ministry’s technical teams in the Moroto Kadam basin, providing evidence of a working petroleum system.

The Africa Oil Week brings together a wide network of global oil and gas operators, contractors and Governments in Africa. Twenty-five (25) ministers and close to 1500 delegates from over two hundred and fifty (250) countries were in attendance.

Local Content

Meanwhile, Minister Muloni noted that Uganda in partnership with the private sector has undertaken capacity building initiatives and enterprise enhancements to ensure optimal participation by Ugandans.

“The laws are a deliberate effort to build the capacity of the private sector along the entire petroleum value chain,” she said.

“Provision of local content is part of the policies and laws governing the sector. Sixteen opportunities have been ringfenced for Ugandan enterprises.”

Peninah Aheebwa, the Director Technical Support Services from the Petroleum Authority of Uganda (PAU) highlighted what the country wants to achieve in terms of local content in the oil and gas sector.

“The government has clearly defined what the value created within the country should be,” she said.

“The key pillars are; the employment of Ugandans, the use of goods and services locally made or manufactured in Uganda, transfer of knowledge and technology, research and development, and enterprise development.”

“Initiatives like in-country accreditation and certification of Ugandans is ongoing. 700 technicians have so far been trained and certified internationally and 200 government staff have been trained in different technical skills to effectively handle the oil and gas sector.”

Ernest Rubondo, the Executive Director of the PAU said that Uganda has realistic local content goals, based on various studies undertaken by the Government and the industry to better understand the capacity within the country.

“The oil and gas sector in Uganda is being managed inline with industry best regulatory practice, which provides for separation of the licensing, regulatory and commercial roles between the Ministry, PAU and the Uganda National Oil Company (UNOC), respectively”, Mr Rubondo added.

Uganda has been commended for laying a robust legal and institutional framework to manage the sector before oil production begins.

“African countries such as Uganda have undertaken institutional and Legislative reforms in order to create a favorable investment climate. Uganda has set up an independent regulatory body, the Petroleum Authority of Uganda. Our Government is supporting the US led consortium, the Albertine Graben Refinery Consortium, that plans to construct the largest refinery within the East African Region.,” Steven Winberg, the Assistant Secretary, United States Department of Energy remarked during his keynote address at AOW.

Nosizwe Macamo, the chairperson Friburge oil and gas, an indigenous company from Angola commended Uganda for implementing a strategy that focused on building capacity in Government and legislative reforms, prior to oil production.

“Uganda’s strategy to first develop local technical capacity in the sector has paid off. Other oil producing countries, especially in Africa are doing this, after they have produced for decades, and have suffered the consequences of weak legal frameworks among other pitfalls. We can learn a lot from Uganda.”

So far, Uganda has made twenty-one (21) discoveries, with 88% drilling rate, and six (6) Billion (Bn) barrels of which 1.4Bn barrels are recoverable. Nine (9) production licenses has been issued to Total E&P, CNOOC Uganda Limited and Tullow Uganda. Three (3) exploration licenses were issued to Oranto Petroleum Limited and Armor Energy.