Cabinet sitting today 3rd August 2016, at parliament building approved the consideration and approval of a request from the minister of energy to allow her issue three petroleum production licenses to Total E&P UGANDA B.V, over discoveries in exploration area 1 of the albertine graben, that is, Ngiri, Jobi-Rii and Gunya to be operated by total E&P Uganda B.V.
The production licenses to be issued have a duration of 25 years and can be renewed for an additional 5 years as provided for in the Production sharing agreement (PSA).
Frank K Tumwebaze, Minister of ICT&National Guidance also cabinet mouthpiece said that all the licenses provide that where there are oil fields which extend across boundaries of license areas, it is agreed that these oil fields will be developed as one unit.
The final investment decision is planned to be taken in 18 months after issuance of the production licenses and first oil is expected in the financial year 2019/2020.
The Petroleum Authority of Uganda will regulate the licensed companies while the National oil company will participate in all licenses to take care of government’s commercial interests.
“The minister will soon address a Press conference with more details on all licenses so far issued and the general progress made in the oil sector to-date,” Tumwebaze said.
Last week, government summoned four firms for negotiations on how to share oil profits.