More Oil Discovery Expected as Uganda Earns Shs7.4bn from 2nd Licensing Round
The Government of Uganda has earned $2 million from the second oil licensing round in the Turaco Block. The Production Sharing Agreement was issued to M/S Armour Energy Uganda (SMC) Ltd, a subsidiary of DRG Global on Friday 12th May 2023. The Energy Minister, Ruth Nankabirwa, stated that the exploration license was awarded according to the Petroleum Act of 2013. The government is committed to sustainable exploration of natural resources and plans to continue exploiting them to generate funds for clean energy
The Government of Uganda has earned US$ 2 million (about Shs7.44bn) from the second oil licensing round in the Turaco Block. While issuing the Production Sharing Agreement to M/S Armour Energy Uganda (SMC) Ltd, a subsidiary of DRG Global on Friday 12th May 2023, Energy Minister Ruth Nankabirwa said the government has so far earned US$ 2 million from “signature bonuses”
She explained that the Exploration License awarded is in accordance with Section 58 of the Petroleum Act, 2013.
“This license marks a significant milestone for the competitive 2nd Licensing Round announced in May 2019 in Mombasa,” Nankabirwa said.
The Minister also signed an Addendum to the Kanywataba PSA with the same company. The Addendum will pave for second renewal of the Exploration License for the Kanywataba Contract Area that will expire on 28th May 2023.
“This means a lot for the Government in terms of development and production. Government is very committed to making sure that we sustainably explore our natural resources for the benefit of everyone. We have taken care of the issues of the environment, and we will continue to exploit (our natural resources). Clean energy needs money to transit from fossil fuel. So, we shall continue to exploit until we get money that we need. These resources will see the country use clean energy,” Nankabirwa said, adding that “we are preparing for the announcement of the third licensing round.”
The company hopes to complete its exploration of the Block by 2024.
While executing the agreement that expires later this month, the company employed 130 workers. Only 30% were non-Ugandans. In the new agreement, the company will employ 70% Ugandans.
Pru Fogarly, the Executive General Manager of DRG Global pledged to deliver on the contract.
“We strongly believe the Turaco Block has prolific potential because the previous exploration works proved the existence of hydrocarbons,” Said Mr. Ernest Rubondo, the Executive Director of Petroleum Authority of Uganda during the signing of the PS with DRG Energy.
Speaking at the signing ceremony, Finance Minister Matia Kasaija said he is hopeful that he will borrow less once money starts coming from Uganda’s oil and gas sector following a beehive of activities currently going on in the Albertine Graben.
“I don’t sleep. I only dream of looking for money to develop this place (Uganda) to be a better place for us all. I look forward to this. Maybe I will borrow less, and create jobs for this country,” Finance Minister Kasaija said.
