Ugandan authorities have signed a production-sharing agreement (PSA) with a subsidiary of Australian firm DGR Global for exploration of oil in the west of the country.
DGR Energy Turaco Uganda Limited will explore in the 637 sq km Turaco block) in the Albertine Rift basin that straddles the African nation’s border with the Democratic Republic of Congo.
Armour Energy Uganda Ltd, another subsidiary of DGR Global, got a two-year extension of its licence for the Kanywataba exploration area, which it has been exploring since 2017.
Turaco was one of five blocks put up for auction in Uganda’s second licensing round, launched in 2019.
“This licence marks a significant milestone for the competitive second licensing round,” declared Ruth Nankabirwa, the country’s Energy Minister.
It would be the second time in seven years that the Turaco block would be awarded to an operator.
In a 2015 bid round, the Nigerian independent Waltersmith Petroman Oil Limited, was awarded the same Block, located in Ntoroko District. A year later, the company had opted out because of terms that included (1)the state’s request that it posted a bond amounting to $58Million for its four year work programme, (2), carry the state 20% and (3) share the profit 50: 50 with the state.
DGR won the block in an updated bid round, started four years ago and delayed by the COVID-19 pandemic as travel curbs affected the bidding and negotiation stages, the Minister explained.
With this transaction, DGR has four years of exploration.
Uganda hosts 6.5Billion barrels of crude oil, 20% (or 1.2Billion barrels), of which is estimated recoverable reserves.
Development plan for Turaco or any other block for that matter is dependent on the delivery of the ongoing development of the Tilenga cluster of fields by TOTALEnergies and the Kingfisher field by CNOOC, as well as the installation of the EACOP pipeline for the evacuation. First oil from these projects is expected by late 2026.