Uganda to award oil exploration licenses in 2015

June 03, 2014 | Africa, Licensing & Concessions

Kampala, Uganda | – Uganda plans to award new oil and gas exploration licenses next year, ending an eight-year halt in licensing, the Petroleum Exploration and Production Department said Tuesday.

The Ugandan government plans to license more than a dozen oil blocks, including at least four big discoveries, in an open bidding process.

Seventy-six of 88 oil exploration and appraisal wells drilled in the country have hit oil, bringing estimated reserves to at least 3.5 billion barrels of crude from 500 million barrels in 2007 and attracting international oil companies to Uganda. The new licensing round planned in the second half of 2015, is expected to attract major international oil companies.

Uganda stopped issuing oil exploration licenses in 2007 in an effort to give the country time to develop regulations to ensure that Ugandans would benefit, according to government officials. Shortly after the licensing ban, oil exploration companies discovered commercial oil reserves.

Less than 40 percent of the country’s oil region has been explored, analysts estimate, wih corruption and political interference hampering development. Despite receiving 10 applications in the past two years, Uganda has only issued one oil production license, for $2 billion, to China’s state-owned China National Offshore Oil Corp. Uganda’s lawmakers have passed two oil bills and are finishing a final bill to regulate their oil industry.

Analysts forecast that current discoveries in Uganda can produce a peak of 200,000 barrels-a-day over a 30-year period.