The Petroleum Directorate says it is undertaking fresh due diligence on Oranto Petroleum Limited before the Nigerian oil company can be granted an exploration license.
The Directorate of Petroleum Director, Robert Kasande says the government decided to do more due diligence on Oranto Petroleum Limited before it can be granted exploration licenses and production sharing agreements.
He did not reveal what the government was exactly trying to find out about the Nigerian Company at this time especially when Energy ministry had decided to sign agreements for Ngassa Shallow Play and Ngassa Deep play contract areas.
The Ministry of Energy Permanent Secretary, Dr Stephen Isabalija mid this month invited journalists to witness the signing of exploration license and Production Sharing agreement to Oranto Petroleum.
The signing of the agreement was called off without explanation. Ministry of Energy officials were reluctant to comment. There reports President Museveni directed the Ministry to halt the deal.
Kasande denied that President Museveni directed the Ministry of Energy to halt signing of the agreement.
The explanation by Kasande that government is carrying out due diligence at the time it was supposed to sign the agreement with Oranto Petroleum is being questioned.
Godber Tumushabe, an Associate Director of Great Lakes Institute for Strategic Studies (GLISS) in an interview wondered why due diligence is being done almost at the tail end of the process.
Some civil society groups have in the past received Oranto’s plans to acquire part of the stake in Uganda’s oil and gas sector with suspicion. Some have claimed the Oranto’s past in countries Liberia was dogged by corruption allegations.
Oranto Petroleum International Ltd is chaired by Nigerian tycoon, Prince Arthur Eze. In March this year, Oranto Petroleum International Ltd announced that it was investing 500 million US Dollars to develop South Sudan’s Block B3.
Prince Arthur Eze has been in Uganda several times in the past. Uganda Radio Network could not access his Nigerian contacts for comments about the Uganda deal.
Meanwhile Kasande is hopeful that Oranto Petroleum International Limited and Australia’s Armour Energy limited will be issued the production sharing and exploration agreements next month.
Australian prospector Armour Energy Ltd according to Kasande is likely to be licensed for the Kanywataba Block. The two were part of the several companies that participated in the competitive bidding exercise last year.
Kasande also revealed that government has called off plan to issue exploration licenses in the controversial Ngaji block in Lake Albert.
While Kasande did not allude to the opposition from conservation groups, he says the Ngaji block did not attract a lot of interest from international Oil companies that submitted bids last year.
Kasande explains that one of the reasons it did not attract more interests could be because it is next to Virunga Park in Congo.
Sixty International conservation and environment Groups including Global Witness have been opposed to oil exploration activities at Ngaji exploration block located close to neighbouring Congo’s Virunga National Park.
They said drilling oil in that block would harm the park’s ecosystem in Albertine rift basin on border with the Democratic Republic of Congo (DRC).
The Ngaji exploration area also covers a part of the Queen Elizabeth National Park, a one of Uganda’s tourist destination rich in buffaloes, lions and elephants among other prized game.
So for now according to Kasande Nganji is off the cards until the Petroleum Directorate carries out fresh evaluation see if it could be brought back to a competitive bid in future.