By URN
The government has signed a Production-Sharing Agreement(PSA) with Uganda National Oil Company for the Kasuruban block in Albertine Graben’s Buliisa district.
The signing of the PSA with the government-owned oil company that took place on Thursday has been described as yet another milestone in the country’s oil and gas sector.
It comes after almost three years after the government announced the second licensing round for which blocks based in the districts of Amuru, Obongi Adjumani, Ntoroko, Hoima and Masind.
Uganda National Oil Company (UNOC together with DGR Global Limited were successful and have therefore been in negotiation with the government for the award of an exploration license.
Energy Ministry Permanent Secretary, Irene Batebe told journalists that with the signing of the Production Sharing Agreement, UNOC has been awarded a two-year exploration license for the Kasuruban area.
According to Batebe, the renewal of UNOC’s license will be subject to its acquisition of a Joint Venture Partner(s) to carry out its financing obligation. The Petroleum (Exploration, Development, and Production) Act of 2013 requires UNOC to handle the government’s commercial interests in the petroleum sector.
Speaking at the signing of the agreement and the award of the license, Energy and Mineral’s Minister, Ruth Nankabirwa said UNOC is expected among other things to pay royalties based on gross total oil production in barrels per day ranging between 5.5% to 18%.
Nankabirwa revealed that as part of the agreement, UNOC had cleared over 368 million shillings and over 94 million shillings being payment for signature bonus and Annual Acreage rental fee.
According to Nankabirwa, UNOC is also required to pay over 110 million shillings or $30000 annually for research and training fees for the contract area to the petroleum fund.
