Oranto’s oil licenses in Albertine have expired

Kampala, Uganda | THE INDEPENDENT | The oil and gas sector could suffer a setback following the expiry of the exploration licenses granted to Oranto Petroleum Limited (OPL). Oranto Petroleum has been operating in Uganda under two licenses for the Ngassa Shallow and Deep Play in Kikuube district in the Albertine Graben.

URN has reliably learned that the contract, which has been running since October 17th, 2017 officially expired at the end of this September. It is yet to be renewed as required by the Petroleum (Exploration, Development and Production) Act, 2013.

According to sources at the Ministry of Energy, the expiry of the licenses has drawn mixed reactions within the Ministry and the Petroleum Authority of Uganda, which regulates the sector. Some have doubted whether Oranto PetroleumLimited (OPL) linked to a Nigerian businessman, Arthur Eze had the financial muscle to continue exploration under Lake Albert.

Eze is also the CEO of Atlas Oranto Petroleum the largest privately owned petroleum exploration and production company in Nigeria.

There has also been talk within the sector that the company may have been frustrated by findings from its operational area. With the expiry of the license, one major issue of concern is whether the company fully complied with sections of the Petroleum (Exploration, Development and Production) Act, 2013 regarding the renewal of the licenses.

The law provides that the holder of a petroleum exploration license may apply for renewal of the license.  Efforts by URN to reach Engineer, Irene Batebe, and the Ministry of Energy’s Permanent Secretary on the phone about the status of Oranto Petroleum were futile because she didn’t answer.

The Petroleum (Exploration, Development, and Production) Act, 2013 states that “An application for the renewal of a petroleum exploration license shall be made not later than ninety days before the day on which the license is due to expire; but the Minister may, where he or she deems fit, accept an application for the renewal of a petroleum exploration license made later than ninety days before, but not in any case after, the date of expiry of the licensee.”

URN could not confirm whether Oranto Petroleum Limited had complied with the provisions of the law.

Honey Malinga, the Acting Director, the Directorate of Petroleum, Ministry of Energy and Mineral Development told URN that Oranto had provided the ministry with some work programs, which he said were being reviewed. He was however hesitant to reveal further details about the latest developments and how long the review would take.

Oranto Petroleum Limited (OPL) was one of the international oil companies that were selected during the first competitive licensing round for 6 blocks in the Albertine Graben. The other was Armour Energy Limited (Australia).  While there has been a general feeling that Oranto has not lived up to expectations, updated information from the Petroleum Authority Uganda indicates that it had acquired new 2D seismic data amounting to 326 line km.

The Authority also indicated that OPL had also completed a drilling solution for Lake Albert.

The grant of stratigraphic licenses to Oranto Petroleum had been described by the then Minister of Energy Engineer, Irene Muloni as a “major milestone” for the country. According to the information posted on the PAU website, stratigraphic licensing aims to ensure that the full potential of the acreage is explored since companies may be inclined not to implement exploration work programs in the shallow reservoirs, especially when they contain gas, as opposed to the deep oil reservoirs.

At the signing of the licenses and Production-Sharing Agreements (PSAs) Prince Eng. Arthur Eze, the Chairman of Oranto Petroleum Ltd had promised that the company’s investment in Uganda was going to be huge. He stated that Oranto had never shied away from committing to investment wherever the company operates.

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URN