HOPES HIGH AS UGANDA TARGETS ANOTHER 8 BILLION BARRELS IN OIL-RICH AREA

Tullow workers at a rig in Buliisa in western Uganda. The government estimates there are undiscovered oil deposits of 8 billion barrels.

As Uganda inches closer to announcing new exploration and production licences that will pump fresh energy into its oil and gas sector, it estimates the amount of its undiscovered deposits at over 8 billion barrels.

According to a senior official at the Ministry of Energy and Mineral Development, this would increase the country’s volume of oil from 6.5 billion barrels to over 15 billion barrels.

This would push Uganda’s discovery ratings above most oil producing countries. Currently, its recoverable volumes of 1.4 billion barrels place it just outside the top 10 African countries that have the biggest reserves.

“As we plan for the discovered resources, there is a lot of potential that still lies out there. Only some 10 per cent of the Graben that has been licensed,” said Proscovia Nabbanja, acting principal geologist at the Directorate of Petroleum.

The competitive licensing round was announced by the energy minister in February to cover six blocks, and exploration licences are expected to be issued before the end of this year, Ms Nabbanja told a meeting organised by Global Rights Alert on gender dynamics in the extractive industries.

The ministry had said that it will announce qualified applicants on August 10, and 10 days later issue them proposal/bid documents and a model production sharing agreements.

The discoveries so far made are in less than 20 per cent of the Graben, whose surface coverage is about 23,000km2, according to FA Kabagambe-Kaliisa, the Energy Ministry Permanent Secretary.

“The Albertine Graben is Uganda’s most investigated, de-risked and prospective sedimentary basin… Therefore, the six blocks on offer present a great opportunity to discover additional resources that will enhance the sustainability of oil and gas production and commercialisation,” said Mr Kabagambe-Kaliisa.

“The government plans to award new petroleum exploration, development and production licences before the end of this year,” he added.

The six blocks on offer are Mvule (344km2), Taitai and Karuka (565km2), Ngassa (416km2), Turaco (425km2, Kanywataba (344km2), and Ngaji (895km2).

But all the blocks have been explored before without much success. Only Tullow drilled two successful wells in Ngassa.

In Turaco, Heritage Oil and Gas reportedly found high concentrations of carbon dioxide.

Seismic data

According to analysts, the government’s strategy is to exhaust their potential considering that it now has more seismic data about the blocks that previous licence holders acquired.

Their initial success rate might explain why the Ministry has not succeeded in attracting any bids from major firms like Total and China National Offshore Oil Corporation (CNOOC) — both of which already operate in Uganda. This is in spite of the fact that it even changed the deadline for announcing successful applicants, which it had set for the end of May, and went back to solicit more bids.

The companies that expressed interest are from Nigeria (4), South Africa (2), United Arab Emirates (2), Australia (2), and USA (2).

Experts say the majority are small, with capability to explore wildcat wells. But the ministry says they are “the right blend” required for exploration, development and production of any additional oil and gas resources in the country.

“The aspect of small to mid-sized companies undertaking exploration and subsequently being replaced by large oil companies is an established process in the oil and gas industry worldwide,” said Peninah Aheebwa, acting principal petroleum officer at the Directorate of Petroleum.

The East African