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Uganda expands its oil exploration with two new partnerships

The government revealed today that the country’s cabinet consented to the signing of production-sharing agreements (PSA) for two oil exploration blocks between two oil firms, including a unit of Australia’s DGR Global (DGR.AX).

The deal was approved on Monday during a cabinet meeting, where members voted for the new exploration opportunity.

According to a statement issued by Godfrey Kabbyanga, a junior information minister, the cabinet on Monday, approved the signing of an agreement with DGR Energy Turaco Uganda Limited, owned by Australia’s DGR Global, for the Turaco exploration area.

The deal includes a two-year exploration license to both firms for the oil blocks in question. These two oil blocks are among those the country had auctioned in 2019, during a licensing round launch.

The oil block in the Albertine Rift basin was first discovered in 2016, with large reserves of crude oil. The block sits at the basin near the border of the Democratic Republic of Congo and covers a large surface area of 637-square kilometers.

The exploration of crude oil in the East African region of Uganda was a hot button topic for the majority of 2022. The Russia/Ukraine war presented an opportunity to Africans to fill in the energy gap that had been created by the conflict.

The war largely affected Russia’s supply of Liquified Natural gas to its former partner states, which caused said partners to look for alternatives.

Regardless, the European Union was assertively against the exploration of oil in certain regions in Africa, especially Uganda which had already initiated an exploration partnership with its neighbor Tanzania and French oil company, TotalEnergies, from the Lake Albert oilfields to the port of Tanga in Tanzania.

The EU argued that such explorations would definitely lead to displacement of residents in the area and the destruction of lives and properties. However, the Ugandan government reassured the general public that those who may eventually be affected by the East African Crude Oil Pipeline (EACOP) project, would be appropriately compensated. Read the story here.

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