Uganda said it extended an oil exploration license to Nigeria’s Oranto Petroleum Ltd. by two years after the company asked for compensation for time lost during the Covid-19 pandemic.
The permit had been due to expire Dec. 29, and was initially granted to scour the Ngassa Shallow and Deep areas in the western Hoima and Kikuube districts in 2017, Solomon Muyita, the Energy Ministry spokesman, said in an email statement.
Extension of the permit is in line with the country’s drive to boost recoverable oil from current levels of 1.4 billion barrels, according to the statement.
A production sharing agreement, royalties, cost of recovery, and profit sharing are part of the terms included in the extension, the ministry said.
In 2017, Oranto was issued two petroleum exploration licenses for the Ngassa Deep and Ngassa Shallow contract areas.
Ruth Nankabirwa, Uganda’s energy minister signed the extension. During the function at the ministry headquarters in Kampala , she urged the company to maximize the additional time granted and ensure a successful outcome.
The minister emphasised the importance of the extension, stating that it will contribute to increasing Uganda’s oil volumes.
Currently, Uganda has six billion barrels of oil in place, with 1.4 billion barrels considered recoverable. Abdul Byakagaba, the general manager of OPL, assured that the company will fufill the work programme as planned within the designated two-year period.
Atlas Oranto Petroleum International Limited (AOPI) comprises Atlas Petroleum International Limited and Oranto Petroleum International Limited. These two private Nigerian indigenous sister companies are fully owned by Prince Arthur Eze and his royal family from the Kingdom of Dunukofia.
The Ngassa block, which was part of Exploration Area 2 (EA2) licensed to Tullow Uganda Operations Pty Ltd (Tullow), was relinquished back to the Government of Uganda in 2011 as per the obligations in the Production Sharing Agreement (PSA).
The block is covered with good quality two-dimensional and three-dimensional seismic data acquired in 2003, 2008, and 2019.
Two deviated wells, Ngassa-1 and Ngassa-2 were drilled on land at the periphery of the main structure between 2007 and 2009 to access the reservoirs that lie under the Lake. The two wells encountered both gas and oil shows.
To date, a large part of the structure remains untested. The Ngassa block was stratigraphically delineated for licensing purposes. Stratigraphic licensing aims to ensure that the full potential of the acreage is explored since companies may be inclined not to implement exploration work programmes in the shallow reservoirs, especially when they contain gas, as opposed to the deep oil reservoirs.
OPL has implemented the following approved work programmes have been implemented as of 2023.
They have acquired new two-dimensional seismic data amounting to 326-line km and reprocessed existing two-dimensional (325 line Km) and 3D vintage seismic data (250 sq. Km).
In addition, the processed the two-dimensional seismic data set. They have undertaken a Petro-Physical study on the Ngassa-1 and Ngassa-2 wells. They have carried out an Amplitude Versus Offset (AVO) study on existing seismic data using the two wells, namely Ngassa-1 and Ngassa-2 A drilling solution study for Lake Albert was completed and conducted several stakeholder engagements and workshops. OPL is preparing to drill one exploration well in the Ngassa Contract Area (NCA) to de-risk the prospects identified from interpreting the seismic data and pre-existing well data.