The Ugandan oil and gas sector may face a setback if the exploration licenses given to Oranto Petroleum Limited (OPL) expire. Oranto Petroleum has been operating in Uganda under two licenses for the Ngassa Shallow and Deep Play in the Albertine Graben’s Kikuube district.
URN has learnt with certainty that the contract, which has been in effect since October 17th, 2017, will formally expire at the end of September. The Petroleum (Exploration, Development, and Production) Act of 2013 requires that it be renewed.
According to Ministry of Energy sources, the permits’ expiration has elicited varied emotions inside the Ministry and the Petroleum Authority of Uganda, which governs the sector. Some questioned if Oranto PetroleumLimited (OPL), which is related to a Nigerian tycoon named Arthur Eze, had the financial clout to continue exploration beneath Lake Albert.
Eze is also the CEO of Atlas Oranto Petroleum, Nigeria’s largest privately held oil exploration and production business.
There has also been speculation in the industry that the corporation was frustrated by findings from its operational area. With the license expiring, one key question is whether the corporation completely complies with parts of the Petroleum (Exploration, Development, and Production) Act, 2013 regulating license renewal.
The law states that the holder of a petroleum exploration license may request for license renewal. URN’s attempts to reach Engineer Irene Batebe and the Permanent Secretary of the Ministry of Energy on the phone about the status of Oranto Petroleum were useless because she did not answer.
The Petroleum (Exploration, Development, and Production) Act, 2013. “An application for the renewal of a petroleum exploration license shall be made not later than ninety days before the day on which the license is due to expire; but the Minister may, where he or she deems fit, accept an application for the renewal of a petroleum exploration license made later than ninety days before, but not in any case after, the date of expiry of the licensee.”
URN was unable to confirm if Oranto Petroleum Limited had complied with the law.
Honey Malinga, the Acting Director of the Ministry of Energy and Mineral Development’s Directorate of Petroleum, told URN that Oranto had presented the ministry with some work programs, which he said were being examined. He was, however, cautious to disclose any additional information about the current developments or how long the review would take.
Oranto Petroleum Limited (OPL) was one of six foreign oil companies chosen for the Albertine Graben’s first competitive licensing round. Armour Energy Limited (Australia) was the other.While there has been a broad perception that Oranto has fallen short of expectations, fresh information from the Petroleum Authority Uganda suggests that it has obtained 326 line kilometers of new 2D seismic data.
The Authority also indicated that OPL had also completed a drilling solution for Lake Albert.
The awarding of stratigraphic licenses to Oranto Petroleum was considered as a “major milestone” for the country by then-Minister of Energy Engineer, Irene Muloni.According to the PAU website, stratigraphic licensing aims to ensure that the full potential of the acreage is explored because companies may be hesitant to implement exploration work programs in shallow reservoirs, especially when they contain gas, as opposed to deep oil reservoirs.
At the signing of the licenses and Production-Sharing Agreements (PSAs), Oranto Petroleum Ltd Chairman Prince Eng. Arthur Eze pledged that the company’s investment in Uganda will be significant. He claimed that Oranto had never shied away from investing wherever the company operates.