Uganda offers six petroleum blocks in first competitive licensing round

February 25, 2015 | Licensing & Concessions, Uganda

Kampala, Uganda | – Uganda will sell its first round of oil exploration licenses after lifting a permitting moratorium that had been in place since 2007.

The East African country will issue permits in six blocks in the Albertine Graben, which borders the Democratic Republic of Congo, Minister for Energy and Minerals Irene Muloni told reporters Tuesday in the capital, Kampala.

More than 400 companies, both local and international, have expressed interest during preliminary stages and the current drop in global prices will ensure the country gets “seriously” committed investors, Muloni said. The government will retain stakes in the permits, she said, without providing details.

Uganda which says it holds an estimated 6.5 billion barrels of oil, expects to begin producing crude in 2018, 12 years after it was first discovered in the East African nation. London-based Tullow Oil Plc has drilled 79 wells in the nation and is developing its prospects in partnership with China National Offshore Oil Corp. and France’s Total SA.

The ministry will issue a request for qualification for the first round of competitive licensing and companies will get a detailed request for bid documents, Muloni said. Details about the six blocks will be provided to investors at a regional petroleum conference in the Rwandan capital Kigali next month.

Uganda last week awarded a contract to a group of companies led by a unit of Russia’s Rostec State Corp. to build a 60,000 barrels-a-day refinery. Rostec’s RT Global beat a group led by South Korea’s SK Engineering and Construction Co. after both made final offers in January.

The government will start negotiations next month with RT Global on a project that includes a 205-kilometres (127-mile) oil-product pipeline, according to the ministry. The winning bidder will hold a 60 percent stake in the refinery. Uganda has the option of selling part of its 40 percent interest to the neighbouring states of Kenya, Tanzania, Rwanda and Burundi.

Bloomberg.