developments in uganda’s oil and gas sector … and gas in uganda.pdf · recent developments in...

11

DEVELOPMENTS IN UGANDA’S OIL DEVELOPMENTS IN UGANDA’S OIL AND GAS SECTOR AND AND GAS SECTOR AND

OPPORTUNITIES FOR INVESTMENTOPPORTUNITIES FOR INVESTMENT

F. A. Kabagambe-KaliisaPERMANENT SECRETARY,Ministry of Energy and Mineral DevelopmentEmail: [email protected]: www.energyandminerals.go.ug

A Presentation to the A Presentation to the

First UK- Uganda Investment Forum2010First UK- Uganda Investment Forum2010

1515thth September, 2010 September, 2010

Congress Centre, LondonCongress Centre, London

Petroleum Exploration and Production Departm ent

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 2

PRESENTATION OUTLINE


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

Abu Graben

Abu Graben

Afar

Dep

ress

ion

Afar

Dep

ress

ion

Aswa Shear zone

Aswa Shear zone

Lake Malawi

Lake Tanganyika

Lake Albert

Albe

rtine

Gra

ben

Albe

rtine

Gra

ben

Eastern ArmEastern Arm

!.!. !.!. !. !.

!.!.

!.!. !.

!.!.

!.!.!.

!.!.

!.

!.!.

!.

SOUTH AFRICA

ZAMBIA

D.R.C

SUDAN

ETHIOPIA

LIBYAALGERIA

NIGERIA

IV. C

OAST

ANGOLA

NAM

IBIA

MAD

AGAS

CAR

MAL

I

3

1. INTRODUCTION (1)

Petroleum Exploration and Production Departm ent4

History of Petroleum Exploration in History of Petroleum Exploration in UgandaUganda

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.

1. INTRODUCTION (2)


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 forpetroleum generation

50000 0 50000 100000

metre

REDUCED TO THE POLETOTAL MAGNETIC FIELD

1983/84

LEGEND

WaterRoadsNational

BoundaryBoundary

Expl. Areas

SUDAN

DEMOCRATI

C REPU

BLIC O

F CONG

UGANDA

-141.2 -85.8 -74.3 -64.3 -52.3 -38.2 -22.6 2.4 57.5nT

150000S

100000S

50000S

050000N

100000N

150000N

200000N

250000N

300000N

350000N

400000N450000N

150000S100000S

3300000E 3350000E 3400000E 3450000E 3500000E 3550000E 3600000E

3300000E 3350000E 3400000E 3450000E 3500000E 3550000E 3600000E

L. GEORGE

L. EDWARD

L. ALB

ERT

...

. ..

..

.

.

MBARARA

KASESE

MUBENDEFORT PORTAL

HOIMA

MASINDI

PARAA

NEBBI

ARUA

MOYO

To Masaka

To Kampala

To Masaka

To Kampala

To Kampala

To Gulu

. Towns

0

0

0

0

0

EA1EA1

EA2EA2

EA3EA3

1. INTRODUCTION (3)


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)


•Albertine Graben sub divided into 11 Exploration Areas

•5 Active Production Sharing Agreements (PSA)

•4 Licensed Operators

2.1 Status of Licensing2.1 Status of Licensing

2. RECENT DEVELOPMENTS IN THE SECTOR (1)


2.2 Data Acquisition2.2 Data Acquisition

a) Geological mapping

Over 10,000 sq. km geologically mapped for petroleum exploration &-

&-&-&- &-&-

&-

&-&-

"S

"S

"S

"S

"S

"S

"S

"S

"S

"S

"S

"S

"S

"S

"S

"S

"S

%

&-

ARUGULU

ARUA

MOYO

HOIMA

MASAKA

KASESE

MAHAGI

NIMULE

ISHASHA

BUSENYI

MUBENDE

MASINDI

MBARARA

NTUNGAMURUKUNGIRI

FORT PORTAL

LEGENDRift valey sediments: soils and marines

Pleistocene volcanic rocks

Ecca series shales (Karro)

Mityana Series

Singo series: conglomerates, sandstone & subordinate shale

Bunyoro series & Kyoga series: Shales, arkoses & quartzites

Kibalian System(presumed): Amphibolites.

Madi series: shists, quartzites marbles and gneisses

Karagwe-Ankolean system

Buganda-Toro system

Mirian gneisses: flaggy gneisses, affected by the mirian tectonism in W. Nile

Granites

Undifferentiated Gneisses

Banded gneiss of Aruan tectonic age in West Nile

Granites

Cataclastites

Volcanic bodies interpreted from aeromagnetic dataLake

International boundaryDepth to basement contours in 1000's m.RailwayMajor RoadFaultsRiver

&- Oil seeps

% Waki-1 well

"S Town

±

0

1 N

2 N

3 N

4 N

30 E 31 E 32 E



7,500 line km of gravity and magnetic data.

9,578 line km of aeromagnetic data

!

!

!

!

!

!

!

!

U G A N D A

D. R

. CO

NG

O

Jobi-1Rii-1

Ngiri-1

K igogole-1

Karuka-1

Taitai-1

Kasamene-1Ngege-1

31°50'0"E

31°50'0"E

31°40'0"E

31°40'0"E

31°30'0"E

31°30'0"E

31°20'0"E

31°20'0"E

31°10'0"E

31°10'0"E

31°0'0"E

31°0'0"E

2°20'0"N 2°20'0"N

2°10'0"N 2°10'0"N

2°0'0"N 2°0'0"N

1°50'0"N 1°50'0"N

µLegend! Oil Well

International Boundary

Copyright: Petroleum Exploration and Production DepartmentDate: January,09

Arc_1960_UTM_Zone_36NProjection: Transverse_MercatorFalse_Easting: 500000.000000False_Northing: 0.000000Central_Meridian: 33.000000Scale_Factor: 0.999600Latitude_Of_Origin: 0.000000Linear Unit: Meter

GCS_Arc_1960Datum: D_Arc_1960

b) Gravity and Magnetic 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

c) Seismic data



44 Wells drilled• 26 Exploration

Wells• 18 Appraisal

Wells

Todate, All wells have encountered oil and/or gas except four

d) Well data

1

Exploration Drilling Trends in East Africa



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.

12

2.3 Resource Potential2.3 Resource Potential

µ

0

1

µµ

1

1

0

* 11+

µ

!

1

0

11

1

1

1

1

1

ª

µ

1

µ

ª

!!

!

Jobi-North

CrocodileMpyo

Buffalo Jobi

Giraffe RiiHartebeest

Pura

WarthogNgiri

EA 1

Kasamene

Wairindi Ngege

Kigogole

Karuka

Waraga

Mputa

Nsoga

TaitaiNgassa

Nzizi

Leopard

Kisinja

Ntera

NgaraEA2

Pelican

Pelican West

Crane

Kingfisher

Turaco

Saddle Bill

Coucal

EA3A

Ngaji

Mpundu

Nkobe

ItiSambia

EA 5

EA-3C

EA-4B

130000

130000

190000

190000

250000

250000

310000

310000

370000

370000

-400

00

-400

00

4000

0

4000

0

1200

00

1200

00

2000

00

2000

00

2800

00

2800

00

4

LegendExploration boundary

WellsHydroCarbonsª Dry Well

+ Gas Shows

* Gas Wellµ Oil Shows

! Oil Well

0 Oil and Gas Shows

1 Oil and Gas Well

Prospects,Leads,DiscoveriesTYPE

Lead

Oil Discovery

Oil and Gas Discovery

Prospect

International boundary

Lake

0 25 50 75 10012.5Kilometers



Nzizi-2 well tested 14mm scf/d of clean dry methane

Mputa-1: 33.3 API flowed 1,035 bopd.

Waraga-1: 33.80 API , flowed 12,050 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 reservesType of crude is 30-34 API low sulphur, waxy crude, Pour point of ~40 degrees Celsius.

Kingfisher: 33 API , flowed 14,000 bopd.

2.4 Discoveries2.4 Discoveries



14

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

CURRENT STATUSCURRENT STATUS



15

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



16

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



17

DEVELOPMENT: Basin wide Development

Central Hub being considered

Loading Hub to refinery and to the Market

Source: Draft report of feasibility study on in-country refining



18

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



19

3.1 Energy Policy3.1 Energy PolicyKey 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.

3. THE NATIONAL OIL AND GAS POLICY FOR UGANDA (1)


1. Institutional Development2. Size of Reserves3. Oil and Gas Revenue Management4. Impact of Oil and Gas Activities5. Contribution of Oil and Gas Resources to the Energy

Mix6. Investment Promotion7. National Participation8. Public Anxiety and Expectations 20

3.2 Issues3.2 Issues

Confirmation of commercially exploitable quantities of oil and gas raises the following key issues:



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 achievem ent of poverty eradication and create lasting value to society’

3.3 Guiding Principles3.3 Guiding Principles1. 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.



3.4 Implementation of Policy has commenced;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. 22



INVESTMENTSDATA TYPE 1998 199

9200

0200

1200

22003

2004

2005

2006

2007

2008

2009*

Investments (US$ Million)

3 0.2 0.25

4 5 15 20 12 50 150 250 436

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.

4. STATUS OF INVESTMENT IN THE SECTOR (1)


4. STATUS OF INVESTMENT IN THE SECTOR (2)


Participation in licenses for the new and relinquished acreages after form ulation of new legislation.

Joint Ventures and farm in arrangem ents in existing licences.

Capital for the em erging infrastructure such as refining and transportation of petroleum com m odities and products

Service provision and contracts in the fields of Engineering, Procurem ent, Construction, Environm ental consultancy, etc, for the upstream and m idstream facilities.

Pow er generation by Independent Pow er Producers.

5. INVESTMENT OPPORTUNITIES IN THE OIL AND GAS SECTOR


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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

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