Govt speaks out on oil deal

Vangold Resources Ltd, a Canadian firm specialising in exploration of energy resources, recently signed a technical evaluation agreement with the Ministry of Infrastructure to ascertain whether there are oil deposits in the East Kivu Graben Basin area located in the Kivu Graben along the frontiers of Rwanda and DR Congo.

Vangold Resources Ltd, a Canadian firm specialising in exploration of energy resources, recently signed a technical evaluation agreement with the Ministry of Infrastructure to ascertain whether there are oil deposits in the East Kivu Graben Basin area located in the Kivu Graben along the frontiers of Rwanda and DR Congo.

The area in the Kivu Graben, dubbed the White Elephant, is part of the great western East African Rift System. The graben, approximately 90km wide and 200km long, trends NNE-SSW and straddles both Rwanda and the Democratic Republic of Congo.

Structurally, Kivu Graben is the southern extension of the Albertine Graben in Uganda, where there has been major oil discoveries by Tullow Oil and Heritage Oil.

“Rwanda’s geographical location ensures that we have a big chance of oil deposits, Vangold after studying the area asked us to license them to undertake research; we gave them the license and they have reported this area has oil deposits,” says Yussuf Uwamahoro, the Energy Coordinator in the Ministry of Infrastructure.

Vangold, with wide-ranging interests in many other countries earlier asked the Rwandan government to give them an exploratory permission, “but Uwamahoro said yesterday: “We don’t have a regulatory framework on exploration yet.”

“Therefore we signed a technical evaluation agreement with them, in that aeromagnetic and gravity surveys will be conducted over a period of 18 months by either plane or helicopter. They will shoot images and assess whether there are sedimentary rocks which are the source of natural gas or oil,” he said.

Vangold will conduct a detailed and comprehensive study of the area for the evaluation of the hydrocarbon potential and the identification of those areas of greatest prospective interest.  The aeromagnetic and gravity surveys will be conducted over a period of 18 months by either plane or helicopter.

The cost of the surveys is estimated at $1.2 million. Vangold was also granted a Right of First Option to negotiate and execute a contract for the exploration and Exploitation of hydrocarbons.

Reports from the Infrastructure ministry indicate that technical studies carried out in the area showed that a total area of 1631 sq km is suspected to have oil deposits.

However, Uwamahoro emphasises that at this point, it is not right to speculate that ‘we have oil’ because there are only studies going on. “We are in the preliminary stage now to assess whether we have oil. We could think is oil yet it is gas”.

He also pointed out that Rwandans should not get excited about oil yet because it takes a very long while to exploit oil resources. “After 18 months we shall find out whether we have oil or not and after that we shall have a regulatory framework and capacity to begin drilling tests.”

He pointed out that even 18 months was little time, “it is only time for conducting geophysics research,” he said.

Using the example of Uganda, Uwamahoro said the existence of oil in mid western Uganda was confirmed in 1938.

“However effective interest in oil exploration did not materialise until 1997 when Heritage Oil was attracted to do seismic surveys in western Uganda. He said his ministry is using Uganda’s experience since Rwanda does not have any oil policy.

We are working with Uganda because they have come a long way in oil exploration.” Vangold will be required to submit progress reports to the Ministry of Infrastructure every two months and after nine months will make an evaluation presentation of the study to the ministry.

Uwamahoro said the his ministry is working hand in hand with the Lands, Forestry, Water and Mines ministry in the oil exploration efforts.

In a related development, recent reports indicated that Uganda stopped licensing any new companies interested in oil exploration, until a new policy is drawn to regulate the lucrative sector in the East African nation.

Kenya and Tanzania also recently signed exploration agreements with international companies.
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