Uganda is going to sign two oil production sharing agreements with a Nigerian firm today, enabling the company to begin exploration work, Reuters reported.

The firm, Oranto Petroleum International, was among a number of companies that bid in the country’s first competitive oil exploration licensing round last year, with two other Nigerian firms and Australia’s Armour Energy also getting through to final negotiations for the award of the PSAs, Punch informed.

Ugandan Ministry of Energy and Mineral Development said the deal with Oranto covers the Ngassa Shallow Play and Ngassa Deep Play exploration blocks located near the southern part of Lake Albert.

Uganda discovered oil in 2006 in the Albertine rift basin along its border with the Democratic Republic of Congo.

Gross crude reserves are estimated by government geologists at 6.5bb of which between 1.4bb and 1.7bb are considered recoverable. Production is expected to start in 2020.

The first batch of licenses that Uganda awarded in the early 2000s was given on a first-come, first-served basis.

However, after the discovery of commercially recoverable reserves the country enacted new laws to manage the sector and under those laws exploration licenses must be granted on a competitive basis.