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Uganda announces new Albertine Graben bid round

Explorers are likely to benefit from infrastructure being put in place for the existing crude export project

Uganda is offering five new exploration blocks in a second licensing round in the Albertine Graben, the area around Lake Albert, where China's CNOOC, France's Total and UK-based Tullow are developing a 216,000bl/d crude export project

Uganda's energy minister, Irene Muloni, told an oil conference in Nairobi, Kenya that she expected strong interest in the round given the current high oil price and that the cost of finding oil in Uganda was relatively low. This cost is currently at under $1/bl in the country compared to a world average of $2/bl, according to a post on the ministry's Facebook page.

"I am very pleased to announce that my five new brides are ready. They are very attractive and easy to find. I invite investors to come and take them up," Muloni told reporters at the press conference.

The five blocks total almost 5,000 km2 in area. They are identified as Avivi (1026 km2, Omuka (750 km2), Kasuruban (1285 km2), Turaco ( 637 km2) and Ngaji (1230 km2).

"Following this announcement, the ministry will issue a Request for Qualification inviting interested firms and/or consortia to submit applications within a period of six months. Upon evaluation of the applications the successful firms/consortia will be issued with bidding documents comprising the model production sharing agreement and data sale regulations among others," Muloni added, according to the post.

The bidding process is due to take five months, followed by negotiations and signing of production sharing agreements. "The licensing round is expected to be concluded with the award of Petroleum Exploration Licenses to successful firms by December 2020," the post said.

Last September, the Uganda National Oil Company (UNOC) said it also planned to explore further acreage in the Lake Albert region with CNOOC, once they had identified a suitable block.

FID still on hold

The bid round announcement comes as a final investment decision (FID) is still awaited on the export project based on reserves in the Kingfisher and Tilenga development, operated by Total and CNOOC, respectively. These are based on an estimated 1.4bn barrels of recoverable resources, plus 500 bn ft3 of non-associated gas..

The estimated FID date has been put back several times, as a dispute with the government rumbles on over tax to be paid by Tullow as part of its farm down of stakes in the project. This needs to be completed before the project can make serious progress. Talks over the payment were extended, after Tullow was presented with a larger than expected tax bill last year.

In a trading update in late April 2019, Tullow said, the discussions were "expected to conclude shortly and will enable completion of the farm-down".

Once FID has been taken, the main part of work on a $3.5bn, pipeline running 1,445 km to the Tanzanian coast, and a refinery at Homa near Lake Albert is due to commence. The government estimated earlier this year that the pipeline could be built by 2022 and the 60,000 bl/d refinery could be operational by 2023, two or three years later than originally envisaged. And, with FID still awaited, these dates could yet be subject to further change

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