By Nicholas Bariyo
KAMPALA, Uganda--Uganda has selected four companies for the final round of its second-ever competitive oil bidding round involving five oil blocks along its western border with Congo, where it has already discovered huge commercial crude deposits, the energy and minerals ministry said Thursday.
The four companies include Total E&P, a unit of France's Total SE, Australia's DGR Global Ltd., Nigeria's PetrolAfrik Energy Resources and the state-run National Oil Co. The development caps two years of a selection process amid the country's continuing efforts to attract investors to its nascent oil industry. At least six firms have expressed interest in the bidding round, underscoring renewed interest in the sector amid recovering global crude prices, according to Robert Kasande, the permanent secretary at the energy and minerals ministry.
"The next phase is to negotiate with the companies, before the signing of the oil production sharing agreements," Mr. Kasande said.
Uganda launched its first oil block licensing round in 2015, resulting in the awarding of exploration licenses to Australia's Armour Energy Ltd., and Nigeria's Oranto Petroleum.
Previously, Uganda handed out blocks on a first-come, first-served basis. Total and China's Cnooc Ltd. currently own licenses for the existing crude fields, believed to contain as much as 6.5 billion barrels of crude.
Over the past five years, Total and Cnooc have been in the process of developing the oil fields, but a litany of disruptions, ranging from tax disputes to disagreements over development plans have delayed commercial output.
Last month, Total signed a $3.5 billion export pipeline deal with Uganda and Tanzania, unblocking a major hurdle for the project. As much as $10 billion is required to develop the 230,000 barrels-a-day oil project and build a 900-mile export pipeline to the Tanzanian port of Tanga, according to Total. Total expects to start commercial oil production from the fields in early 2025.
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(END) Dow Jones Newswires
June 03, 2021 12:13 ET (16:13 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.