The second extension of bids for Uganda’s oil licensing round ends without any takers

• Uganda’s second extension of bids for oil licensing round for five new blocks in the Albertine Graben expired last month without any new expressions of interest.
• The government pushed back the closing date to September 30, to give bidders more time, hoping that conditions would be more favourable for more international companies to apply.

Uganda’s second extension of bids for oil licensing round for five new blocks in the Albertine Graben expired last month without any new expressions of interest from oil companies according to media reports. It appears that Uganda has lost six months as the first deadline was March 30, 2020. The government pushed back the closing date to September 30, to give bidders more time, hoping that conditions would be more favourable for more international companies to apply.

The proposal of the Ugandan government was to intensify upstream activity especially exploration in a bid to strike more oil and increase its reserves above the 6.5 billion barrels of oil that it discovered in 2006.

 In view of the development, the Permanent Secretary in the Ministry of Energy Robert Kasande stated that the ministry proposes to proceed with the licensing as the global outlook for upstream activity continues to look gloomy. The Covid-19 pandemic has shrunk the global economic activity, curtailed air travel and also led to the collapse of crude oil prices. Energy Reports have been saying that the number of drilled wells globally may fall to the lowest level this year since the beginning of the century as oil and gas activity, has been thwarted by the pandemic. According to Rystad Energy’s forecast  the decline in drilling is expected to extend to 2025.

The Ministry will soon be evaluating the six applications received for the five blocks. The five blocks are Block01 (Avivi) covering 1,026 square kilometers; Block02 (Omuka) covering 750 square kilometers, Block03 (Kasuruban) which stretches 1,285 square kilometers, Block04 (Turaco) that covers 637 square kilometers and Block05 (Ngaji) covering 1230 square kilometers.