Uganda grants new petroleum exploration license for Turaco Block, signs addendum for the Kanywataba production sharing agreement

By Our Energy and Oil sector Reporter

Uganda has gone ahead to grant  another petroleum exploration license for Turaco Block and signed an addendum for the Kanywataba production sharing agreement for petroleum exploration , development and production.

The signing ceremony between the government of Uganda through the Ministry of Energy and Mineral Development and M/S DGR Energy Turaco Uganda SMC Ltd was presided over by the Minister , Dr. Ruth Nankabirwa  (who signed on behalf of government ) and witnessed by Finance Minister Matia Kasaija at the Ministry’s head office in Kampala. Others at the function included the Ministry of Energy technical head ,the Permanent Secretary , Eng. Irene Bateebe , and the  Executive Director  Petroleum Authority, Mr. Earnest .N.T. Rubondo.

Ms.Pru Borghat signed on behalf of  DRG Energy Turaco Uganda SMC Ltd and witnessed by  Dr. Tom Buringuriza  the company’s Country Manager .

Energy Minister Ruth Nankabirwa hands of the license after the signing ceremony witnessed by finance Minister Matia Kasaija and Ps. Eng. irene Bateebe

Nankabirwa said that  the new Petroleum Exploration License (PEL) for the Turaco contract area marked a significant achievement of Uganda’s competitive Second Licensing Round for the oil and gas sector.

The agreement grants a Petroleum Exploration License with an acreage of 635 Sq. Kilometres, of four years exploration period split into two exploration periods of two years each.

She said an Advisory Committee chaired by the Petroleum Authority of Uganda, and consisting of representatives from government and the licensee will be set  to review and approve all annual exploration work programmes, budgets and production forecasts.

“ Government expects payment of royalty based on the Gross Total Daily Production in barrels of oil per day with the rate of royalty for both PSAs ranging from 7.5% to 20%. Cost Recovery limit for both Cost Oil and Cost Gas set at 65% each,” Nankabirwa stated adding that they will also be a payment of a signature bonus amounting to US$ 100,000 and payment of research and training fees per year amounting to USD 200,000 to the Uganda Petroleum Fund.

The agreement also provides for payment of annual acreage rental fees for the first exploration period for the Turaco Contract Area  of USD 12,700 to the Uganda Petroleum Fund and a performance guarantee/commitment during the first exploration period of twenty-seven and half percent (27.5%) of the minimum work program for each period.

The Permanent Secretary, Eng. Irene Bateebe said that the second licensing round for petroleum exploration was implemented  to attract additional investment in the country’s oil and gas sector; expand the country’s resource base which stands currently at 6.5 billion barrels of oil with 1.4 billion barrels recoverable to increase the country’s  revenue base.

She said that licensing also enhances the country’s sustainability of oil and gas production and also allowed the Ministry of Energy to respond to the numerous investors who expressed interest in investing in the country’s oil and gas industry.

Finance Minister ,Matia Kasaija welcomed the second licensing round for the Turaco and extension of exploitation of Kanywataba blocks noting that sustainable exploitation of Uganda’s natural resources will generated the needed revenues for national economic growth and development .

Eng. Bateebe explained that the Licensing round comprised of five biddable blocks of the Avivi covering the districts of Obongi, Adjumani, Amuru and part of Arua and with an aerial coverage of 1026km2, Omuka covering the districts of Nebbi, Nwoya and Buliisa and with an aerial coverage of 750km2.

Kasuruban covering the districts of Buliisa, Hoima and Masindi and with an aerial coverage of 1285km2, Turaco covering the districts of Ntoroko and with an aerial coverage of 635km2, and Ngaji covering the districts of Kanungu, Rukungiri and Rubirizi with an aerial coverage of 1230km2  

The signing event  marked the end of the second licensing round for Uganda since UNOC was awarded an exploration over the Kasuruban on 2nd February 2023. “ The Second Licensing Round was implemented in three stages  which included , the Request for Qualification (RfQ) Stage,  Request for Proposal (RfP) stage and the PSA negotiation stage which has taken four  years since it was announced in May 2019.

Ms. Borghat on behalf of M/S DGR Energy Turaco Uganda SMC Ltd pledged that the company will create jobs for Ugandans during the implementation of the project .


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