Uganda aims to sign deals by the year-end with the four oil exploration companies it had invited for talks in its first licensing round, a senior energy ministry official said on Wednesday.
Those selected to negotiate production sharing agreements (PSAs) were Nigeria’s WalterSmithPetroman Oil Ltd, Oranto Petroleum International and Niger Delta Petroleum Resources, and Australia’s Armour Energy Ltd.
Uganda launched the round in February 2015 for six exploration blocks, covering a total of 3,000 square km (1,150 square miles). Bidding documents were given to 16 oil firms but only seven submitted bids.
“What is happening now is we are negotiating with four applicants and we expect to conclude the process and sign PSAs by the end of this year,” Nurudin Njabire, petroleum geologist at the directorate of petroleum at the Ministry of Energy and Mineral Development, told an East Africa oil and gas conference.
The three oil firms already operating in Uganda – London-listed Tullow Oil, France’s Total and China’s CNOOC – did not participate in this bidding round.
Uganda first discovered crude oil in 2006 in the Albertine rift basin along Uganda’s border with Democratic Republic of Congo. It estimates reserves at 6.5 billion barrels, with between 1.4 billion and 1.7 billion barrels recoverable.
Uganda said in April it would build a pipeline for its oil through Tanzania rather than Kenya, which had wanted to secure the export route.
“We also expect that at the end of this month or early next month, FEED (Front-End Engineering Design) is going to start. We expect to work towards getting this oil pipeline by 2020,” Njabire said.
Uganda also expects to identify a lead investor for a refinery – the cost of which the ministry puts at about $4 billion – by the end of this year. Two previous attempts collapsed earlier this year.