Australian company to explore oil in Ntoroko district

OIL EXPLORATION | NTOROKO DISTRICT

Government has granted a petroleum exploration license to an Australian company to explore oil in Ntoroko district.

Uganda is seeking to find more oil wells to boost its oil revenues for development.

The country has since evolved into a petroleum province with 21 oil and gas discoveries being made and an estimated 6.5 billion barrels of oil in place and a recoverable volume of 1.4 billion barrels.

The minister for energy and mineral development, Eng. Irene Muloni, will tomorrow grant an exploration license to Armour Energy Limited and sign a production sharing agreement for the Kanywataba Block in Ntoroko.

Armour Energy is a leading natural gas and crude oil producer in Australia with expertise in exploring for oil and gas. In 2015, the energy ministry called for the first competitive bidding round for six exploration blocks, covering a total of 3,000 square kilometres, mainly in Western Uganda.

A statement from the ministry said after receiving and reviewing submitted bids by over 17 companies, the ministry last year announced that Nigerian firms Walter Smith Petroman Oil Limited, Oranto Petroleum International, Niger Delta Petroleum Resources and Armour Energy, had been considered for the bids.

In June this year the ministry had planned to issue exploration licenses for Ngassa Shallow Play and Ngassa Deep Play. Contract areas located near Lake Albert were going to be issued to Oranto Petroleum International Limited, but negotiations were not completed.

Armour Energy joins other oil explorers that include UK's Tullow Oil, China's CNOOC and France's Total E&P. These companies recently received production licenses after their field development plans were accepted by the Government and are now working on ensuring that Uganda starts producing its first oil barrel in 2020. The country expects to earn US$3b (sh10.8 trillion) annually from oil revenues once production starts.

Investment by industry in seismic surveys, exploratory and appraisal drilling, has reached over $2.5b (sh9b). The first commercial discovery of oil was made in 2006 in Kaiso Tonya area on the shores of Lake Albert.