Uganda has extended the oil exploration license of Nigeria’s Oranto Petroleum Ltd. by two years after the company requested compensation for time lost during the Covid-19 pandemic. The permit, initially granted in 2017 to explore the Ngassa Shallow and Deep areas in the western Hoima and Kikuube districts, was set to expire on December 29. The extension aligns with Uganda’s efforts to increase recoverable oil reserves from the current 1.4 billion barrels. The extension includes terms such as a production-sharing agreement, royalties, cost recovery, and profit-sharing. Currently, Uganda has six billion barrels of oil in place, with 1.4 billion barrels considered recoverable.
Key Points:
- Uganda has granted a two-year extension to Nigeria’s Oranto Petroleum Ltd.’s oil exploration license, compensating for time lost during the Covid-19 pandemic.
- The extension covers the Ngassa Shallow and Deep areas in the western Hoima and Kikuube districts and aims to boost Uganda’s recoverable oil reserves.
- Terms of the extension include a production-sharing agreement, royalties, cost recovery, and profit-sharing.
- Currently, Uganda has six billion barrels of oil in place, with 1.4 billion barrels considered recoverable.
- Oranto Petroleum Ltd. was issued two petroleum exploration licenses for Ngassa Deep and Ngassa Shallow contract areas in 2017.
- The extension is expected to contribute to increasing Uganda’s oil volumes.
- Uganda’s Energy Minister, Ruth Nankabirwa, emphasized the importance of the extension, urging Oranto Petroleum to maximize the additional time granted for a successful outcome.
- Abdul Byakagaba, the General Manager of Oranto Petroleum Limited (OPL), assured that the company would fulfill the work program within the designated two-year period.
- Oranto Petroleum International Limited (AOPI) comprises Atlas Petroleum International Limited and Oranto Petroleum International Limited, fully owned by Prince Arthur Eze and his royal family from the Kingdom of Dunukofia.
- The Ngassa block, part of Exploration Area 2 (EA2), was relinquished back to the Government of Uganda in 2011 and has good quality seismic data.
- Oranto Petroleum has implemented various approved work programs, including acquiring new two-dimensional seismic data, reprocessing existing seismic data, conducting petro-physical studies, and preparing for exploration well drilling.
Source: Bloomberg