Energy Minister Says Tullow, Total to be Granted Production Licenses Soon

2448 Views Kampala, Uganda

In short
Oil companies Tullow and Total are to be granted the long awaited production licenses soon according to state minister for energy in charge mineral resources Peter Lokeris. Speaking to Uganda Radio Network on the sidelines of a public dialogue on oil in Kampala, Lokeris said within a month or two the two oil companies will be granted the long-awaited production licenses.

Oil companies Tullow and Total are to be granted the long awaited production licenses soon according to State Minister for Energy in charge Mineral Resources Peter Lokeris.

Speaking to Uganda Radio Network on the sidelines of a public dialogue on oil in Kampala, Lokeris said within a month or two the two oil companies will be granted the long-awaited production licenses.

The production licenses paves way for the development stage which leads to the actual production of oil and gas.

The development comes a day after government offered six petroleum blocks in its first competitive licensing round for oil exploration in the Albertine Graben.

The development also comes a week after the government awarded a consortium led by Russia's RT Global Resources a contract to build and operate Uganda's 2.5 billion dollar crude oil refinery in the Lake Albert Basin.

According to minister Lokeris there are now few issues to iron out before the production licenses can be granted.

//Cue in: Yes we're going …
Cue out: … discussions we have.//

While contributing to the dialogue, Robert Kasande, the Refinery Project Manager who represented the Permanent Secretary Kaliisa Kabagambe, said final discussions are underway to grant Tullow and Total production licenses within a month or two.

Both Tullow and Total have been pushing for production licenses for some of their fields in blocks 1 and 2 but the government kept asking many questions delaying things even further.

The delay in granting production licenses for Tullow and Total has caused jitters in the oil and gas sector impacting on investments.

Elly Karuhanga, the president of Tullow Uganda, said the delay has halved the share price of Tullow Oil on the London Stock Exchange. He feared that and further delay would ward-off investments in the sector.

Ahlem Friga-Noy, Total E&P Uganda's corporate affairs manager, told URN that if government grants them the production license soon it would be a great milestone towards production of oil in Uganda.

Friga-Noy said she cannot comment further and has her fingers crossed because they haven't heard from the government yet. Tullow's corporate communications manager Cathy Adengo could not be reached for a comment.

Kasande said China National Offshore Oil Company, which was granted the first production license for Kingfisher field in Hoima District, is also still expected to produce the First Oil by 2018.