Vangold Resources Ltd has confirmed that the Minister of State in charge of Energy and Communications, Republic of Rwanda, has granted to Vangold the exclusive rights to commence negotiations for a production sharing license for oil and gas in the north western part of Rwanda.
The concession, known as White Elephant, is 2,708 sq kms in area and represents 11% of the landmass of Rwanda.
With the discovery of oil in southwestern Uganda by Heritage Oil Corporation, a technical review will determine whether Rwanda has the extension of that discovery. The agreement now calls for Vangold to undertake a technical review of all information available and commence negotiations for a production sharing agreement over a period of 18 months.
The technical review will cover the northwestern part of Rwanda, the block named White Elephant by Vangold, which is part of the Albertine Graben where oil was discovered in Uganda. Vangold's team of petroleum geologists (located in Nairobi, Kenya) is confident that the Uganda discovery could be reflected in Rwanda as an extension of the Lake district's geology. Tullow Oil and Heritage Oil have reported their latest well in this basin is flowing 4,100 bopd.
During the signing ceremony, Rwanda's Minister of State for Energy and Communications, Eng Alberta Butare, stated that Rwanda is committed in the long term to explore for hydrocarbon potential. Currently, the country has significant reserves of methane gas in the Lake Kivu area, which is being developed commercially. Upon completion of the technical review and concluding negotiations with Vangold, the government may consider participating in the exploration phase.
Present at the ceremony were representatives from Vangold, Joseph Katarebe and Idi Kawadi. When asked the significance of White Elephant by Ms. Anthe Vrijandt, Expert External Links at the Ministry, Mr. Kawadi responded by saying, "The country's part of the East African Rift Valley Basin lies on a downhill trend and we expect there to be a significant reservoir of oil in Rwanda's area."
In response to Minister Butare's comments, Mr. Katarebe, Vangold's country representative, said that, "With the admission of Rwanda and Burundi in East African Community trading bloc effective July, 2007, the company will take advantage of technical expertise within the region. A technical team has been mobilized from Kenya to undertake the technical review." He further stated that, "If the company were to mobilize resources outside the region, it would take a few months as opposed to weeks."
Vangold is an active explorer for resources and a fast growth oil producer in North America. The exploration portfolio is extensive and it also includes interests in international ventures and development projects.
After the technical review, Vangold will undertake development initiatives within the area in consultation with the government and villagers. Geologically and technically, Mr. Brynelsen met with Mr. Reuben Kashambuzi in Entebbe, Uganda, Commissioner, Petroleum Exploration and Production Department, who advised him that the Albertine Grabine extends southwards from Uganda into Rwanda. With Albertine Grabene's known discovery, a 10 percent probability exits that there is a commercial and viable discovery in Rwanda, Vangold will commit its financial and human resources.
