- Model Petroleum Production Share Agreement to be signed
- Deposits estimated at 3.5 Billion barrels discovered in the region recently
Kigali, 2nd July, 2014:Rwanda is preparing a call for proposals from oil companies to bid for exploration rights on Lake Kivu on its western border, continuing from where Canadian firm Vanoil Energy Ltd left off.
About six companies have already expressed interest to resume the exercise in the Lake in western Rwanda which various experts have suggested could contain huge petroleum deposits.
The so-called Kivu graben is an extension of the Albertine region where Uganda discovered massive crude oil deposits estimated at around 3.5 billion barrels.
The discovery was made in western Uganda at the border with Democratic Republic of Congo (DRC). Uganda is moving closer to signing an agreement with either a Chinese or Russian company that will build and manage its proposed petroleum refinery in July 2014.
Rwandan officials say Vanoil Energy Ltd which had the oil exploration rights failed to impress the government on proposed timelines to complete exercises to ensure the presence of oil.
A timeline of at least two years was set to conduct a detailed seismic survey and drill at least one well to confirm oil presence, however the Canadian company failed to indicate it would meet these government expectations, prompting the hunt for another firm to resume activities.
Officials from the Rwanda Natural Resources Authority (NRA) confirmed that the terms of reference to hire another firm to resume the search for oil were being prepared. However, challenges exist. Lake Kivu is volatile because of huge accumulation of Methane and Carbon dioxide gases.
Scientists have warned that should the lake be tempered with, the gas could explode leaving a trail of destruction, affecting 2 million people. A similar lake in another African country Cameroon exploded in 1986, suffocating anything its path. But then the solution is in the problem. The methane is a source of electricity.
Currently Rwanda has model petroleum Production Share Agreement (PSA) which it could sign with the company that would strike oil in Lake Kivu.
Rwanda, one of the active members of the EAC, is poised to benefit more if it strikes some oil, too. Rwanda however currently has huge methane gas deposits under Lake Kivu, the same lake that is believed to have oil. More than 25MW will be generated beginning September 2014.
Meanwhile, a major oil conference – the 15th East African Petroleum Conference and Exhibition is due in Kigali from 4th to-6th of June 2015. During the conference both gas and oil investment opportunities will be showcased to the multitudes of the foreign investors coming from far away and in the region.