The government of Uganda has today signed a production sharing agreement (PSA) and granted an exploration license to the Australian based DGR Energy Turaco Uganda Limited, to commence exploration of the Turaco Oil Block located in Ntoroko district.
This exciting development comes as part of the government’s second licensing round, which opened up five oil blocks for bidding.
The Turaco Oil Block, now entrusted to DGR Energy Turaco Uganda Limited, marks the second block to secure an investor’s interest. The first was Kasurubani, which obtained a license earlier this year and is under the management of the Uganda National Oil Company (UNOC).
In a signing ceremony held at the Ministry of Energy offices in Kampala, Energy Minister Ruth Nankabirwa expressed the government’s commitment to the oil sector by also signing an Addendum to extend the Production Sharing Agreement with Armour Energy.
This extension allows Armour Energy, a subsidiary of Australia-based DGR Global, to continue its exploration activities in the Kanywataba Block, also located in Ntoroko district.
During the event, Ms. Pru Forgaty, the Executive General Manager of Armour Energy, expressed her gratitude to the Ugandan government for the opportunity to explore the Turaco Block.
She emphasized the complementary nature of the Turaco and Kanywataba blocks in their operations. Furthermore, Forgaty revealed that plans were underway to bring in an oil rig as early as next year, showcasing their commitment to expanding operations in Uganda.
This rig will be utilized for the consecutive drilling of two wells, indicating the scale of their ambitions.
On her part, Minister Ruth Nankabirwa said the PSA signing “demonstrated the Government’s commitment to sustainably exploit the country’s oil resources for the betterment of everyone.”
“You all know that we have had challenges when it comes to development of petroleum, in regards to the environment,” she said.
“But we need that money from fossil fuels because we want to use it to transit to clean energy. That transition requires money.”
Ernest Rubondo, the Executive Director Petroleum Authority Uganda said he was optimistic about the potential of the Turaco block.
“ I have personally explored the areas where Armour Energy has been licensed, and I can tell you that this is the area in the beginning which we thought was the most attractive and had the most potential in the Albertine Graben,” he said.
‘The work that has been done there has shown very good results and is still demonstrating potential.”
The Ministry Permanent Secretary Mrs Irene Bateebe said the second round of licensing is hoped to among others, attract additional investment in the oil sector, and to expand the country’s resource base which currently stands at 6.5 billion barrels, of which 1.4 billion is recoverable.
The five biddable oil blocks in the second licensing round are Avivi, (located in Obongi, Adjumani, Amuru and part of Arua); Omuka (Nebbi, Nwoya and Buliisa), Kasurubani, (Buliisa, Hoima and Masindi), Turaco (Ntoroko), and Ngagi (Kanungu, Rukungiri and Rubirizi).
The signing event was attended by Finance Minister Hon Matia Kasaija, who congratulated the new licensee.
“We look forward to witnessing the success of this project so that I can, maybe, borrow less,” he said.