The government announced today that the country’s cabinet has agreed to the signing of a production sharing agreement (PSA) for two oil exploration blocks between two oil companies, including the DGR Global Australia (DGR.AX) unit.
The deal was approved on Monday during a cabinet meeting, where members voted for new exploration opportunities.
According to a statement issued by Godfrey Kabbyanga, junior information minister, the cabinet on Monday approved the signing of an agreement with DGR Energy Turaco Uganda Limited, owned by DGR Global Australia, for the Turaco exploration area.
The deal includes a two-year exploration license for both companies for the oil block. These two oil blocks are among those that the state will auction in 2019, during the launch of the license round.
Oil blocks in the Albertine Rift basin were first discovered in 2016, with large reserves of crude oil. The block is located in a basin near the border of the Democratic Republic of the Congo and covers an area of 637 square kilometers.
Crude oil exploration in the East African region of Uganda is a hot button topic for most of 2022. The Russia/Ukraine war gives Africans an opportunity to fill the energy gap created by the conflict.
The war has largely affected Russia’s supply of liquefied natural gas to former partner countries, prompting those partners to seek alternatives.
Regardless, the European Union is firmly against oil exploration in certain areas of Africa, especially Uganda which has started an exploration partnership with neighboring Tanzania and the French oil company, TotalEnergies, from the Lake Albert oil field to the port of Tanga in Tanzania. .
The European Union stressed that such exploration would inevitably lead to the displacement of residents in the area and damage to lives and property. However, the Ugandan government has assured the general public that those who may be affected by the East African Crude Oil Pipeline (EACOP) project, will be duly compensated. Read the story here.