Uganda issues oil exploration license to Australian Armour Energy

Uganda on Thursday issued an oil exploration license to an Australian firm, Armour Energy Limited (AEL) in a bid to expand the country’s resource base from the current 6.5 billion barrels of oil.

Irene Muloni, Uganda’s minister of energy and mineral development while speaking at the signing ceremony here said there have been protracted negotiations due to the sustained low oil prices.

“We therefore appreciate the effort and commitment shown by Armour Energy Ltd that has been cooperative throughout the process, which shows their willingness to be a partner in the development of our oil and gas sector,” Muloni said.

She said the license covers a period of four years in the Kanywataba Contract Area, in the Albertine Graben.

Government also signed a Production Sharing Agreement with the exploration firm.
Robert Kasande, acting Permanent Secretary said one of the major achievements from this licensing round was the development of a state of the art data room which remains open to the industry to view and purchase data.

The data room will also be used for future licensing rounds.

“The ministry was able to generate 2.4 million U.S. dollars from the sale of data to bidders which was paid to the Uganda Petroleum Fund,” he said.

AEL joins China National Offshore Oil Corporation, France’s Total and Britain’s Tullow Oil in exploring for oil in Uganda.

Uganda in May this year signed an agreement with neighboring Tanzania to kick off the construction of a crude oil pipeline from Albertine Graben to the Tanzanian seaport of Tanga.

Construction of the 1,445-km oil pipeline is expected to start towards the end of this year and will last up to 2020. The first drop of crude oil is expected the other side of the pipeline by the end of 2020, according to goals set by both governments.

Uganda also plans to construct an oil refinery producing initially 30,000 barrels of oil per day.

Experts argue that if used well, the oil revenues are likely to fast track Uganda’s economic development unlike in some African countries where the resource has turned out to be a curse.

 

Source: Xinhua