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Tullow, Total and CNOOC have lost their explorations licences for the Kanywataba prospect area

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Three oil firms lose exploration licences

Three oil companies-Tullow, Total and CNOOC have lost their explorations licences for the Kanywataba prospect area to government disbanding a joint exploration venture in the area.

The six-month licences which government issued to the firms early this year to explore oil in the 171 square kilometer area in Hoima and Ntoroko districts, expired in July after a failed discovery of oil in the area.

Mr Bukenya Matovu, the head of communications at the ministry of Energy and Mineral Development said the companies would no longer be able to explore for oil in the area. The area now reverts to government until a new petroleum exploration law comes into force.

“There was no legal room for extending the exploration licence since they had not found any oil there. The law only allows for an extension for appraisal purposes if they find any oil in the area”.

The three companies licensed to undertake petroleum exploration, development and production in the country will continue to undertake agreed work programmes in the other licensed areas and also commence production once a refinery is established, according to the energy ministry.

“The Kanywataba Exploration Area 3A (Southern Lake Albert) in Ntoroko District has reverted to government following the expiry of the 6 months Exploration licence which was issued to Tullow in February 2012”, reads a statement from the Ministry of Energy.

The license was issued in recognition of the time lost during the tax dispute over the sale of Heritage’s interests in Uganda to Tullow, was to enable the drilling of an exploration well on the Kanywataba Prospect.

According to reports, the three companies entered into partnership to, after Frances’ Total and China’s CNOOC bought into London-listed Tallow’s exploration assets in the country for a total of $2.9billion.

CNOOC was then appointed operator of the area and subsequently drilled the Kanywataba-1 well in May 2012 to a total depth of 2,105metres. The Chinese company hit a dry well in July, although seismic assessments had indicated that it was rich with oil. This happened at a time, when the licences had expired and the government refused to renew them.

The country’s oil reserve is estimated at 3.5 billion barrels.

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