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June 4, 2021

Uganda shortlists four firms for oil exploration licences in five blocks

The selected firms will sign oil production sharing agreements pertaining to the five blocks

By Archana Rani

Uganda has shortlisted four companies in a tender for exploring five oil blocks located long its western border with Congo.

The shortlisted firms include France’s Total subsidiary Total E&P, Australia’s DGR Global, Nigeria’s PetrolAfrik Energy Resources and the state-run National Oil Co, reported the Wall Street Journal.

The publication quoted Uganda Energy and Minerals Ministry as saying that the country has already identified huge commercial crude deposits at the blocks.

The shortlisted firms will now compete in final round of what is claimed to be the country’s second-ever competitive bidding process.

The country earlier awarded exploration licenses for the oil blocks on a first-come, first-served basis.

Uganda Energy and Minerals Ministry permanent secretary Robert Kasande told the publication that country received expression of interests from at least six firms in the bidding round, which was launched amid recovering global crude prices.

Kasande added: “The next phase is to negotiate with the companies, before the signing of the oil production sharing agreements.”

The move comes as the country seeks ways to attract investors to boost its oil production.

Following the licensing round in 2015, Uganda awarded its first oil block exploration license to Australia’s Armour Energy and Nigeria’s Oranto Petroleum.

However, commercial output from the existing licences owned by France’s Total and China National Offshore Oil Corporation (CNOOC) in Uganda have been delayed for the past five years.

The delay is attributed to disruptions ranging from tax disputes to disagreements over plan for development.

Earlier this year, Total and its partners completed the final agreements required to build the $3.5bn Lake Albert development project in Uganda and Tanzania.

The partners include CNOOC, Uganda National Oil Company (UNOC) and Tanzania Petroleum Development Corporation (TPDC).

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