As far as frontier oil markets go, Uganda is one of the few remaining on the African continent, estimated to hold up to 6.5 billion barrels of oil reserves. Its Lake Albert Development Project – which encompasses the Tilenga and Kingfisher upstream oil projects and construction of the East African Crude Oil Pipeline – is expected to produce 230,000 barrels per day when it comes online in 2023. As a result, the East African nation would become sub-Saharan Africa’s fourth-largest producer and rival the output of mid-level producers like Equatorial Guinea and Gabon.
Pan-African independent explorer Atlas Oranto Group is a prominent actor within Uganda’s emerging exploration scene. In October 2017, the firm was awarded the PSC exploration term for the Ngassa asset for a four-year period. The license was one of three issued in the country’s first oil and gas licensing round, covering the Ngassa Shallow Play and Ngassa Deep Play (awarded to Atlas Oranto) and Kanywataba Exploration Block (awarded to to Armour Energy Limited). For its part, Atlas Oranto envisages a bespoke barge-mounted drill rig on Lake Albert to exploit the offshore concession and is seeking technical assistance from foreign partners. At the upcoming U.S.-Africa Energy Forum 2021 organized by Energy Capital & Power in Houston – which will connect American capital, technology and expertise with African investment opportunities – Atlas Oranto will present its broad portfolio of investment and partnership opportunities, including its promising play in Uganda’s oil-rich Albertine Graben.
“Atlas Oranto has been operating in Uganda since 2018 and will continue to invest heavily in frontier markets that promise to bring energy development to all corners of the continent,” says Prince Arthur Eze, Executive Chairman of Atlas Oranto. “In addition to developing our Ngassa offshore Lake Albert concession in collaboration with foreign partners, we are seeking to expand our operations in Uganda, with our offices in Entebbe serving as a technical base for exploration and development activities throughout the region. With prolific fiscal terms and significant resource potential, Uganda has every capability to pioneer oil production in East Africa.”
In addition to Uganda’s untapped resource potential, the country is home to a competitive fiscal regime and strong government support that has made it an increasingly attractive destination for foreign investment. Utilizing a transparent, free-market approach, Uganda’s Ministry of Energy and Mineral Development launched its Second Licensing Round for the exploration of five blocks in the Albertine Graben, with the period for submitting applications for qualification concluding last September. Moreover, the Uganda National Oil Company has invited interested parties to establish joint-venture partnerships, demonstrating a commitment from the State to engage with International Oil Companies and facilitate skills and technology transfer to its nascent oil and gas sector.
Within its oil and gas framework, Uganda’s model Production Sharing Agreement (PSA) provides for production sharing and cost recovery, in which investors can recoup their exploration, development and production costs before sharing the remaining production with the government. The PSA also incorporates signature bonuses, rental and training payments, in which payments are front end loaded and not linked to project profitability, along with fiscal stabilization clauses that ensure that fiscal terms are not altered over long-term, large-scale investments. In an effort to attract foreign direct investment to petroleum and other capital-intensive sectors, Uganda has passed legislation that reassures investors of their protections, as well as established bilateral investment treaties with a host of countries, including the U.S. As a result of its dynamic upstream fiscal regime and continuous improvements to the ease of doing business, Uganda represents an attractive destination for foreign investors to partner with indigenous firms and exploit frontier acreage.
To learn more about U.S.-Africa energy investment opportunities, find out more information regarding sponsorship opportunities at USAEF 2021, or register for the Houston summit, visit www.USAfricaEnergy.com or contact James Chester at [email protected].
