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Oil and Gas

A discovery of petroleum wells in the Lake Albert region has enhanced the sector’s joie de vivre.

According to the Petroleum Exploration and Production Department, 21 oil and/or gas discoveries have been made in the country to date. 87 oil wells have been drilled and there are 21 fields in existence. Currently over 3.5 billion barrels of STOIIP have been discovered with over 1.2 billion barrels of oil equivalent estimated as recoverable. However, appraisal of the discoveries is still ongoing. Less than 40% of the Albertine Graben has been evaluated.
Investment opportunities available in upstream activities include:

  • Licensing for petroleum exploration and production
  • Joint Ventures and farm-in arrangements in existing licenses
  • Heated crude oil pipelines to refinery
  • Environmental services, given that most activities are located in ecologically sensitive areas. Waste treatment and disposal for both solids and liquids is critical
  • Service provision and contracts in the fields of Engineering, Procurement, Construction, Environmental consultancy, drilling services, down hole services etc.

 

Background and Status                   

The Albertine Graben (AG), the area running along the entire western border of Uganda has been confirmed to contain commercial oil and gas resources. The Graben, which is a rift basin, forms the northernmost extension of the western arm of the East African Rift Valley and stretches from south-western Uganda at Lakes Edward and George to West Nile, a distance of about 500 kilometres. The AG is shared between Uganda and the Democratic Republic of Congo, but on the Ugandan side it averages a width of 45 kilometres.
Government’s systematic efforts to promote the exploration of oil and gas in the country during the last 25 years have paid off with investors being attracted into the sector and the discovery of commercial petroleum reserves. Oil and Gas Exploration activities in the country have had an unprecedented 90% drilling success rate, with 58 of the 64 exploration and appraisal wells drilled in the country to date encountering oil and/or gas.
Twenty (20) oil and/or gas discoveries have been made in the country and the in-place volume of petroleum in the country is currently estimated at over 2.5 billion barrels of oil equivalent,with about 1 billion barrels recoverable. This level of resources represents a significant development for the country as it means that production of oil can now be undertaken commercially. Over US$1.5 billion has been invested in the sector since 1998; bigger investments are anticipated during the development, production and refining phases.
The oil companies currently licensed in the country are: Neptune Petroleum Uganda Limited, Tullow Uganda Limited and Dominion Petroleum Limited. However, Tullow Uganda Limited is in the process of farming-down some of its interests to Total E&P Uganda B.V. and China National Offshore Oil Corporation (CNOOC) Uganda Limited.
 The National Oil and Gas Policy
 Following the discovery of oil in the country in 2006, Government formulated the National Oil and Gas Policy for Uganda through a consultative process. The Policy was approved  in February 2008. The policy articulates Government’s goal and objectives in the utilisation of oil and gas resources. It stipulates the strategies and key actions which Government should take to address the challenges in the sector.
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’.Government is now implementing the policy by putting in place anew regulatory and institutional framework to govern the sector. Capacity building, national participation and information sharing with stakeholders are receiving special attention. In line with the policy, planning for the development of a refinery in the country has commenced with a view of satisfying local and regional demand before considering export options.
The Graben coincides with a sensitive biodiversity ecosystem. Activities are undertaken in line with existing environment laws and statutes. Government is improving the environment regulatory framework through development of a sensitivity atlas and undertaking a Strategic Environment Assessment for the Graben, updating existing laws and regulationsand multi-institutional monitoring of operations.
Opportunities in the Country’s Oil and Gas Sector

The emerging oil and gas sector in Ugandais providing opportunitiesforthe country which include;

  1. Investment opportunities in Joint Ventures with companies holding licenses in the country, Emerging Infrastructure like the Refinery, pipelines and storage facilities, Service Provision in the fields of Engineering, Procurement, Construction, Environmental Consultancy, among others.
  2. Employment opportunities in general and the opportunity to develop a highly skilled man power in oil and gas related disciplines.
  3. The establishment of international companies like Schlumberger, Baker Hughes, Halliburton, Weatherford, Norsea Group, among others which provide services to the oil and gas sector.
  4. Stimulation of other industries such as the manufacturing sector.
  5.  Infrastructure development like road networks especially in areas in and around  the Albertine Graben.
  6. Corporate Social Responsibility initiatives undertaken by the oil companies in the areas ofoperationlike construction of schools, health centres and enterprise projects.
  7.   Income to the country through taxation of employees, service providers and transactions in the oil and gas sector. .
 Looking Forward
 Government will continue to implement the National Oil and Gas Policy and looks forward to the development and subsequent production of petroleum in the country, and ensuring that the petroleum resources are beneficial to all Ugandans.
Government is committed to effective and efficient development of the Country’s Emerging Oil and Gas Sector through implementation of the National Oil and Gas Policy for Uganda

 


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