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DEVELOPMENTS IN UGANDA’S OIL AND GAS SECTOR AND OPPORTUNITIES FOR INVESTMENT

DEVELOPMENTS IN UGANDA’S OIL AND GAS SECTOR AND OPPORTUNITIES FOR INVESTMENT. A Presentation to the First UK- Uganda Investment Forum2010 15 th September, 2010 Congress Centre, London. F. A. Kabagambe-Kaliisa PERMANENT SECRETARY, Ministry of Energy and Mineral Development

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DEVELOPMENTS IN UGANDA’S OIL AND GAS SECTOR AND OPPORTUNITIES FOR INVESTMENT

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  1. DEVELOPMENTS IN UGANDA’S OIL AND GAS SECTOR AND OPPORTUNITIES FOR INVESTMENT A Presentation to the First UK- Uganda Investment Forum2010 15th September, 2010 Congress Centre, London F. A. Kabagambe-Kaliisa PERMANENT SECRETARY, Ministry of Energy and Mineral Development Email: psmemd@energy.go.ug Website: www.energyandminerals.go.ug 1

  2. 1. Introduction • The Albertine Graben • History of Petroleum Exploration 2. Recent Developments in the Upstream Oil and Gas Sector • Status of Licensing • Data acquired • Resource Potential • Oil and gas discoveries • Current Status 3. The National Oil and Gas Policy for Uganda 4. Status of Investment in the Sector and Opportunities 6. Conclusion PRESENTATION OUTLINE

  3. Afar Depression Abu Graben Aswa Shear zone Albertine Graben Lake Albert Eastern Arm Lake Tanganyika Lake Malawi 1. INTRODUCTION (1) • Albertine Graben: • Northern most part of the Western arm of the East African Rift System • Runs along Uganda’s western border with DRC • Tertiary basin, 500 km long, averaging 45 km wide and 23,000 sq km in Uganda • 1200 km from the coast 3

  4. 1. INTRODUCTION (2) • History of Petroleum Exploration in Uganda • 1920 – 1940 Early Efforts • Oil Seepages reported 1925 • Drilling of Waki B1 well in • 1938 by Anglo European • Investment Company of • South Africa. • Some Shallow wells drilled • in Kibiro and Kibuku areas.

  5. 1. INTRODUCTION (3) • 1940 – 1983: No Activity • World war II • Colonial policy • Political uncertainties • 1983 – To-Date: Revival Period • 1983 Acquisition of • Aeromagnetic Data over the • entire Albertine Graben • Indication of three main • depocentres conducive for • petroleum generation EA1 EA2 EA3

  6. Revival Period: Key Highlights 1985: Enactment of the Petroleum Act 1991: Formation of PEPD and commencement of ground geological and geophysical data acquisition 1993: Formulation of the Petroleum Exploration and Production Regulations 1997: Licensing of Heritage, subsequent acquisition of 2D seismic data in 1998 and drilling of Turaco wells in 2002 – 2004 2001- 2006: Licensing of Hardman(now Tullow) in EA2, Heritage in EAs1&3A, Neptune in EA 5. 2006: First oil discovery in Uganda made by Hardman Resources, the Mputa discovery 2007: Licensing of Dominion in EA 4B 2008: Formulation of the National Oil and Gas Policy 2010: Oil and/or gas discoveries made totalling to 17. Appraisal program ongoing and exploration continuing 1. INTRODUCTION (4)

  7. 2. RECENT DEVELOPMENTS IN THE SECTOR (1) 2.1 Status of Licensing • Albertine Graben sub divided into 11 Exploration Areas • 5 Active Production Sharing Agreements (PSA) • 4 Licensed Operators 7

  8. 2. RECENT DEVELOPMENTS IN THE SECTOR (2) 2.2 Data Acquisition a) Geological mapping Over 10,000 sq. km geologically mapped for petroleum exploration 8

  9. 2. RECENT DEVELOPMENTS IN THE SECTOR (3) b) Gravity and Magnetic data • 7,500 line km of gravity and magnetic data. • 9,578 line km of aeromagnetic data

  10. . 2. RECENT DEVELOPMENTS IN THE SECTOR (4) c) Seismic data • 5,774 line km of 2D seismic data • 2,406 km on Lake • 3,368 km on land • 1,232.3 sq. km of 3D seismic data • Energy source are; Dynamite, weight drop and airguns 10

  11. 2. RECENT DEVELOPMENTS IN THE SECTOR (5) d) Well data • 44 Wells drilled • 26 Exploration Wells • 18 Appraisal Wells • Todate, All wells have encountered oil and/or gas except four

  12. Over 2 billion barrels of Oil equivalent in place. • 30% of Albertine Graben has been explored. • 17 oil and/gas discoveries made. • More than 50 prospects have been identified. • numerous leads to be followed up with seismic data. 2. RECENT DEVELOPMENTS IN THE SECTOR (6) 2.3 Resource Potential 12

  13. Waraga-1: 33.80 API , flowed 12,050 bopd Nzizi-2 well tested 14mm scf/d of clean dry methane Mputa-1: 33.3 API flowed 1,035 bopd. 2. RECENT DEVELOPMENTS IN THE SECTOR (7) 2.4 Discoveries Kingfisher: 33 API , flowed 14,000 bopd. • Four discoveries namely Mputa, Kajubirizi (Kingfisher), Kasamene and Nzizi at Field Development Stage. • These fields (Mputa, Kajubirizi & Kasamene) hold in excess of 700 million barrels recoverable reserves • Type of crude is 30-34 API low sulphur, waxy crude, Pour point of ~40 degrees Celsius. 13

  14. 2. RECENT DEVELOPMENTS IN THE SECTOR (8) CURRENT STATUS • Exploration • Exploration continues in Exploration Areas 1, 4B and 5 • Appraisal is being undertaken on the discoveries made in Exploration Areas 1 and 2 • Development • Exploration Areas 2 and 3A are at the development stage • Draft Field Development Plans have been submitted for Kingfisher, Kasamene and Nzizi discoveries 14

  15. 2. RECENT DEVELOPMENTS IN THE SECTOR (9) DEVELOPMENT: Integrated Power Project (IPP) • The gas to power concept delivers gas from Nzizi discovery to fuel a 50MW power plant, supplemented by test crude from EWT 15

  16. 2. RECENT DEVELOPMENTS IN THE SECTOR (10) DEVELOPMENT: Extended Well Testing (EWT) • Longer testing operations allows for larger area of investigation. • Improved understanding of STOIIP • Testing without flaring • Enabler for testing in sensitive environments and close to communities • Establishes early production experience: Essential input into overall development • Transportation schemes. Essential for Production Infrastructure 16

  17. 2. RECENT DEVELOPMENTS IN THE SECTOR (11) DEVELOPMENT: Basin wide Development • Central Hub being considered • Loading Hub to refinery and to the Market 17 Source: Draft report of feasibility study on in-country refining

  18. 2. RECENT DEVELOPMENTS IN THE SECTOR (12) DEVELOPMENT: Value Addition through Refining • Feasibility study for refining in the Country undertaken. • Report being discussed • Recommends location, size, configuration financing options and market for the products 18

  19. 3. THE NATIONAL OIL AND GAS POLICY FOR UGANDA (1) • 3.1 Energy Policy Key Policy objectives from the mid 1980s were covered in the Energy Policy and were; 1. Capacity building and institutional development, 2. Investment promotion through acquisition of field geological, geophysical and geochemical data and attraction of oil companies to invest; and 3. Monitoring compliance of agreed work programs, budgets and environment protection. 19

  20. Institutional Development Size of Reserves Oil and Gas Revenue Management Impact of Oil and Gas Activities Contribution of Oil and Gas Resources to the Energy Mix Investment Promotion National Participation Public Anxiety and Expectations 3. THE NATIONAL OIL AND GAS POLICY FOR UGANDA (2) 3.2 Issues Confirmation of commercially exploitable quantities of oil and gas raises the following key issues: 20

  21. To deal with the emerging issues, a new policy, the National Oil and Gas Policy for Uganda has been put in place. The Policy was formulated through a wide consultative process and approved by Cabinet Feb 2008 The goal of the policy is; ‘to use the country’s oil and gas resources to contribute to early achievement of poverty eradication and create lasting value to society’ 3.3 Guiding Principles 1. Using finite resources to create lasting benefit to society. 2. Efficient resource management. 3. Transparency and accountability. 4. Competitiveness and productivity. 5. Protection of environment and conservation of biodiversity. 6. Spirit of co-operation. 7. Capacity and institution building. 3. THE NATIONAL OIL AND GAS POLICY FOR UGANDA (3) 21

  22. 3.4 Implementation of Policy has commenced; • Drafting of new petroleum legislation to operationalise policy. • Support for the introduction of training courses focusing on petroleum industry done. BSc Petroleum Geoscience at Makerere, Artisan and technical training at Uganda Petroleum Institute, Kigumba. • Studies undertaken on refining in Uganda. • Communication Strategy for oil and gas is being developed. • Close monitoring of environment and biodiversity being undertaken. • New institutions are being put in place. • Local content study being undertaken to ensure optimum national participation in oil and gas activities. 3. THE NATIONAL OIL AND GAS POLICY FOR UGANDA (4) 22

  23. 4. STATUS OF INVESTMENT IN THE SECTOR (1) INVESTMENTS • Over US$900m invested in seismic and drilling of wells since 1998. • Bigger investments required to appraise and develop discovered oil and gas fields as well as infrastructure for transportation and refining. • Investments will require developing and ensuring a conducive environment for sustaining the required levels of investment.

  24. 4. STATUS OF INVESTMENT IN THE SECTOR (2) 24

  25. Participation in licenses for the new and relinquished acreages after formulation of new legislation. Joint Ventures and farm in arrangements in existing licences. Capital for the emerging infrastructure such as refining and transportation of petroleum commodities and products Service provision and contracts in the fields of Engineering, Procurement, Construction, Environmental consultancy, etc, for the upstream and midstream facilities. Power generation by Independent Power Producers. 5. INVESTMENT OPPORTUNITIES IN THE OIL AND GAS SECTOR

  26. 1. Petroleum exploration in Uganda has been ongoing since early 1920s. 2. Commercially Exploitable Reserves of oil have now been confirmed in Uganda. 3. Government has put in place a policy to guide development of the sector. 4. Implementation of Policy has commenced; 5. The oil industry in Uganda has potential of providing a lot of investment opportunities to oil companies and other investors in the industry. 6. CONCLUSION 26

  27. THANK YOU 27

  28. Welcome to the 5th East African Petroleum Conference and Exhibition 2011 (EAPCE’11) Kampala 2-4 February 2011.

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