Uganda shortlists four companies for oil exploration

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Uganda shortlists for companies for oil exploration

Uganda has shortlisted four companies for an exploration round following its second oil exploration tender. The companies include France’s Total who recently changed its name to TotalEnergie, Australian DGR Global, Nigerian PetrolAfrik Energy Resources, and Uganda’s state-owned National Oil Co.

The tender involved five oil blocks along Uganda’s border with Congo, where oil has already been discovered. The development caps two years of a selection process amid the country’s continuing efforts to attract investors to its nascent oil industry. At least six firms had expressed interest in the bidding round, underscoring renewed interest in the sector amid recovering global crude prices,

Robert Kasande, the permanent secretary at the energy and minerals ministry said that negotiations will be done with the companies before the signing of the oil production sharing agreements. Uganda launched its first oil block licensing round in 2015, resulting in the awarding of exploration licenses to Australia’s Armour Energy Ltd., and Nigeria’s Oranto Petroleum.

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Delayed commercial output

Over the past five years, Total and Cnooc have been in the process of developing the oil fields, but a litany of disruptions, ranging from tax disputes to disagreements over development plans have delayed commercial output.

The French supermajor is also participating in the East-African Crude Oil Pipeline (EACOP) project which involves construction of a 1,443 kilometer-long pipeline expected to transport oil from Uganda to the Tanga port in Tanzania. Total’s subsidiary, Total East Africa Midstream, is the developer of the project.

The pipeline, which will be the largest in Africa, is part of Uganda’s comprehensive plan to develop its oil resources. Later this year, the government plans to launch tenders for the construction work on the infrastructure along with a refinery.