Tullow Oil and Total E&P Uganda will be issued with production licences before the end of this month, the State minister for Minerals (designate), Mr Peter Lokeris, has disclosed adding that the licences for six blocks are up for grabs for Tullow and Total.
“Everything is set. Before the end of the month, we shall issue licences for six blocks. At the moment, I cannot divulge more details but just know that Tullow and Total will be those we shall sign agreement with,” Mr Lokeris said, speaking on the sidelines of a dialogue on “Enhancing local participation in the oil and gas industry.”
“We took our time because we wanted to make sure everything is alright. We didn’t want to regret later. And now we are convinced that we have a good deal and government will not lose out in terms of royalties and revenues (taxes) for we are covered at every stage,” the minister explained.
During the presentation at the conference organised by the Advocates Coalition for Development and Environment (ACODE), the minister said so far, a total of 120 exploration and appraisal wells have been drilled.
Out of these, prospectors have encountered petroleum in 106 wells in the subsurface. This represents a drilling success rate of 88 per cent, which is the highest worldwide. It is estimated that the in-place volume of petroleum in the country to-date is more than 6.5 billion barrels of oil equivalent. These resources, he said are sufficient to support commercial oil production in the country.
“It is important to note that the investment in seismic surveys, exploration and appraisal drilling increased from $50 million (Shs165.6 trillion) in 2006, to $3.2 billion by the end of 2015, and is projected to go over $3.4 billion mark in 2016.
According to data from the Ministry of Energy and Mineral Development, this next phase is expected to happen within the next 4-5 years and attracting additional investment of approximately $20 billion.
Dr Arthur Bainomugisha, the ACODE executive director in his remarks said oil resource is a national resource and it should be treated as such. He said division based on tribe, region or even politics should be divorced from oil and gas if meaningful local content agenda is to be achieved.