East Africa to witness more auctions of exploration blocks in 2015

EADespite the falling crude prices, Tullow Oil has said they will continue their drilling and production activities in Kenya and Uganda. (Image source: Derek Keats/Flickr)Amid growing pressure for transparency and accountability, East Africa is going through a wave of change in the management of exploration and production rights of its newly struck oil and gas resources

According to Simon D’ujanga, energy minister of Uganda, the country has approved plans to open up six exploration blocks in Albertine Basin in Uganda for licensing.

“The government plans to invite companies to participate in this licensing round during the first quarter of 2015,” added D’ujanga.

Uganda’s petroleum resource is now estimated to be more than 6.5bn barrels of oil, an upward revision from 3.5bn barrels that was estimated in August 2012.

Tanzania has already received bids for some of the eight oil and gas blocks it offered in its latest competitive bidding round, noted the minister.

“China-based CNOOC and Russia’s state-run Gazprom were among companies that submitted bids for the blocks on offer in the fourth round. Statoil and ExxonMobil, which have made big gas discoveries offshore Tanzania, submitted a joint bid for one of the offshore blocks,” added D’ujanga.

Abu Dhabi state-owned investment fund Mubadala applied for offshore Block 4/2A in Tanzania, which covers an area of 3,630 sq km, while another UAE firm Ras Al Khaimah Gas has submitted a bid for the Lake Tanganyika North Block with a size of 9,670.2 sq km, he revealed.

Martin Heya, head of petroleum at Kenya’s Energy and Petroleum Ministry, said, “Kenya also plans to switch to bidding rounds to license its oil exploration blocks, moving away from one-on-one negotiations with firms, as interest in its economy increases following a recent oil discovery.”

The competitive bidding will be carried out through a proposed law known as the Petroleum (Exploration, Development and Production) Bill, 2015 that is awaiting Parliamentary approval, noted Heya.

“Exploration interest in Kenya has surged since the country announced a three year ago its first oil strike discovery by UK-based explorer Tullow Oil in the country’s north. The country has since recorded multiple discoveries,” added Heya.

Silvana Tordo, analyst at Brandon S Tracy, said that Kenya has mapped out at least eight additional exploration blocks that will be put up for bidding under the proposed laws. Uganda and Kenya are on track to become oil exporters by late 2018 or early 2019, he added.

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