(Ecofin Agency) - The Ugandan Ministry of Energy has announced that the country plans to sign contracts with the four oil exploration companies it had summoned for talks in its first licencing round, by the year-end.
This four oil companies chosen to discuss production sharing agreements (PSAs) are Nigeria's WalterSmithPetroman Oil Ltd, Oranto Petroleum International, Niger Delta Petroleum Resources and Australia's Armour Energy Ltd.
The East African country launched its first round in February 2015 for six exploration blocks, covering a total of 3,000 km². Bidding documents were granted to 16 oil firms but only seven had 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 Reuters.
Uganda first found crude oil in 2006 in the Albertine rift basin along its border with Democratic Republic of Congo. It estimated reserves are at 6.5 billion barrels, with between 1.4 billion and 1.7 billion barrels recoverable.
In April, the country had chosen to construct a pipeline for its oil through Tanzania instead of Kenya, which had wanted to secure the export route. Uganda also intends to find a lead investor for a $4 billion refinery by the end of this year as two former attempts had collapsed earlier this year.
“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.