Written by Atipo Ambrose Peter Jr., Partner and Head, Energy, Mining and Infrastructure, Kiiza & Kwanza Advocates & Legal Consultants
Uganda is one of the new oil states that are currently attracting a great deal of global attention for the right reasons – its huge oil potential! It is against this background that an informative piece has been put together for The Oil Council’s Members to provide a legal, regulatory and fiscal overview, as well as an analysis of recent developments in the country’s oil sector.
Uganda is bordered by Eastern DRC in the West and Southern Sudan in the North. These countries offer a massive market, and are likely to join the East African Common Market soon, making the East African region one of the world’s illustrious mineral rich regions. Uganda has had a relatively stable political environment since 1986 when the current ruling party took over power, and has successively maintained power through democratic process of universal adult suffrage since 1996. The rest of East Africa has also had a relatively stable political environment save for the DRC that was plagued by wars in the not so distant past.
The government has three organs namely the Executive, The Legislature and the Judiciary. These organs are headed by the President, Speaker of Parliament and the Chief Justice respectively enhancing a democratic system of checks and balances.
With a current GDP of $36,745bn and a GDP per Capita of US $1,146, the country has realised massive economic progress, and with the prevailing fiscal and economic stability, the future of this small nation of 236,040 square kilometres is looking very bright especially amidst the recent discoveries of massive quantities of commercial oil and gas reserves, which so far stand at a minimum 2bn barrels which still represents less than 30% of the explored areas.
Exploration Areas and Current Operators
The country is divided into various blocks and currently the number of licensed blocks stands at eight –covering a total area of approximately 18,000 square kilometres, with four of the eight blocks being major blocks that have proven successful. There are four major operating companies namely Tullow Oil, Heritage Oil, Dominion Petroleum and Tower Resources, all being independents.
However, with their recent successes in commercial discoveries and the recent farm out of Heritage from the Tullow-Heritage Joint Development, majors such as Eni International, Exxon Mobil (NYSE:XOM), CNOOC (NYSE:XOM) and Total (NYSE:TOT) have…
