Uganda signs oil exploration deal with Australia's Armour Energy

ArmourUganda is aiming to revamp it exploration activities. (Image source: Philippa McKinlay/Flickr)Uganda has signed a petroleum exploration deal with Australian company Armour Energy Limited, a move that will see oil exploration at Kanywataba block which is located near Lake Albert on the border with Democratic Republic of Congo

Speaking to the press at the signing in the Kampala, Irene Muloni, energy minister, said that the deal with Armour Energy is expected to play important role in revamping Uganda’s oil and gas sector.

He also stated that the Ugandan government hopes to expand the country’s exploration efforts that currently stand at 6.5bn barrels oil in place.

Prior to this, Kanywataba block was licensed to Frances' Total, China's CNOOC and Britain's Tullow. However, all the three firms returned their control of Kanywataba block to the Ugandan government in 2012, after failing to finding oil.

Muloni said that initially 19 firms expressed their interest for the oil exploration deal for the six blocks that cover 2,674 sq km area. Armour and other three Nigerian firms are the winners of the bid, with Armour being the first company to sign this agreement with the government, she said.

According to Reuters, the government has approved deals with one of the Nigerian firms, Oranto Petroleum International, and the government is looking forward to signing deals with the company in three weeks' time.

The other part of the production sharing agreement includes acquisition of seismic data and drilling of at least one well. In addition, an advisory committee will be formed and it will be chaired by the Petroleum Authority of Uganda, consisting of representatives from the government and the licensee to monitor annual exploration work programmes, budgets and production forecasts, according to the Independent.

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