Uganda upstream petroleum sector, implementation of the national oil & gas policy


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Uganda upstream petroleum sector, implementation of the national oil & gas policy

  1. 1. UGANDA’S PETROLEUM UPSTREAM SECTOR: IMPLEMENTATION OF THE NATIONAL OIL AND GAS POLICY Presentation By Mr. Ernest N.T. Rubondo, Commissioner Petroleum Exploration and Production Department January, 2012 1Petroleum Exploration and Production Department PRESENTATION OUTLINE 1. Introduction 2. Progress of Petroleum Exploration in Uganda 3. Legal and Regulatory Framework 4. Implementation of the National Oil and Gas Policy 5. Conclusion 2Petroleum Exploration and Production Department 1
  2. 2. 1. INTRODUCTION 1.1 Petroleum Value Chain PROMOTION AND LICENSING EXPLORATION DEVELOPMENT UPSTREAM PRODUCTION DECOMMISSIONING TRANSPORTATION MIDSTREAM REFINING GAS PROCESSING AND CONVERSION DOWNSTREAM DISTRIBUTION MARKETING SALES 3Petroleum Exploration and Production Department Introduction (2) 1.2 Sedimentary Basins in Uganda SUDAN 1. Albertine Graben 2. Hoima Basin DRC Kadam-Moroto Basin Basins 3. Kadam-Moroto Basin whose potential is Lake Kyoga Hoima under Basin 4. Lake Kyoga Basin investigation UGANDA 5. Lake Wamala Basin L. Wamala KENYA Not Prospective Basin 6. Lake Victoria Basin Lake Lake Victoria Edward The Albertine Graben is the TANZANIA RWANDA most prospectivePetroleum Exploration and Production Department 2
  3. 3. Introduction (3) 1.3 The Albertine Graben  The Graben forms the northern most part of the Western arm of the East African Rift System  Runs along Uganda’s western border with DRC Lake Albert Eastern Arm  500 km long, averaging 45 km wide and 23,000 sq km in Tanzanian Uganda. Lake Tanganyika Craton  1300 km from the coast Lake Malawi 5Petroleum Exploration and Production Department 2. PROGRESS OF PETROLEUM EXPLORATION IN UGANDA 2.1 History of Exploration 1920 – 1945: Preliminary Exploration  Reporting of oil seepages  Drilling of Waki-B1 in 1938 by Anglo European Investment Company of South Africa  Some shallow stratigraphic wells drilled in the areas of Kibiro and Kibuku based on oil seep observations 1945 – 1980: Stagnation  Initially due to World War II  Change in Colonial Policy  Political uncertainties 6Petroleum Exploration and Production Department 3
  4. 4. Progress of Petroleum Exploration in Uganda (2)1980 to Date: Consistent and Modern Efforts 3300000E 25000 0 3350000E 25000 50000 3400000E 3450000E 3500000E 3550000E MOYO1983: Acquisition of Aeromagnetic Data over the 400000N 400000N metres entire Albertine Graben To Gulu 350000N 350000N ARUA1985: Enactment of the Petroleum Exploration and International boundary 300000N 300000N Production Act Roads Lakes NEBBI 250000N 250000N PARAA1991: -Formation of PEPD -PSA between Fina Exploration Uganda b.v and 200000N 200000N MASINDI T B ER AL Government L. To Kampala 150000N 150000N HOIMA1993: Enactment of Petroleum Regulations 100000N 100000N1997: Licensing of EA 3 (Semliki Basin), to Heritage To Kampala MUBENDE FORT PORTAL To Kampala 50000N 50000N2001: Licensing of EA 2 (Northern Lake Albert Basin) KASESE 138.0 78.0 To Masaka to Hardman L. GEORGE 50.0 0 0 28.0 8.0 L. EDWARD2002 to 2004: Drilling of Turaco-1, 2 and 3 wells in -6.0 50000S 50000S -22.0 MBARARA -40.0 Semliki Basin; To Masaka -56.0 -74.0 100000S 100000S -96.02003/4; Acquisition of seismic data over Lake Albert . -122.0 -166.0 150000S 150000S Magnetic anomaly (nT) 3300000E 3350000E 3400000E 3450000E 3500000E 7 3550000EPetroleum Exploration and Production Department Progress of Petroleum Exploration in Uganda (3) 2005:  Licensing of Exploration Area 5 (The Rhino Camp Basin) to Neptune Petroleum 2006:  First discovery of oil in Kaiso- Tonya area (Mputa-1 well) 2007:  Exploration Area 4B licensed to Dominion Petroleum 2007 - 2011  More acquisition of seismic data and drilling of wells in all licensed areas 8Petroleum Exploration and Production Department 4
  5. 5. Progress of Petroleum Exploration in Uganda (4) 2.2 Status of Licensing Albertine Graben is currently sub divided into 11 EAs 5 Active PSAs Licensing of new acreage suspended after the 1st discovery Currently 3 Licensed Operators in the country;. Tullow finalizing farm-down to TOTAL and CNOOCPetroleum Exploration and Production Department Progress of Petroleum Exploration in . Uganda (5) 2.5 Data Acquired  10,000 sq. Km of Uganda has been geologically mapped for petroleum exploration  7,500 line km of gravity and magnetic data  9,578 line km of aeromagnetic data  7,039.55 line km of 2-D seismic data  1,607.3 km2 of 3-D seismic data 2.4 Wells Drilled  64 exploration and appraisal wells drilled; 58 successful.  Less than 40% of the Albertine Graben has been evaluated. 10 10Petroleum Exploration and Production Department 5
  6. 6. Progress of Petroleum Exploration in Uganda (6) 2.6 Discoveries and Reserves  20 oil and/ or gas discoveries made to date.  Over 2.5 billion barrels of STOIIP.  Estimated 800 million to 1 billion barrels of recoverable oil equivalent 11Petroleum Exploration and Production Department Progress of Petroleum Exploration in Uganda (7) 2.7 Foreign Direct Investments YEAR 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* Investments 3 0.21 0.25 4 5 15 20 12 46 126 278 266 352 (US$ Million) 400 Millions (US$) Neptune EA5 350 Dominion EA4B 300 Heritage EA3A 250 Heritage EA3 Tullow EA2 200 Herirage EA1 150 100 50 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Year *Total cumulative investments = US$1,127.5 in 2010 (not to year end) Petroleum Exploration and Production Department 6
  7. 7. 3. LEGAL AND REGULATORY FRAMEWORK Uganda’s Petroleum Exploration and Production is Governed by: 1. The Petroleum (Exploration and Production) Act, Cap 150, Laws of Uganda, enacted in 1985 and revised in 2000 2. Petroleum (Exploration and Production) (Conduct of Exploration Operations) Regulations, 1993 3. Production Sharing Agreements (PSAs) 4. Other relevant statutes and guidelines such as Environment, Wildlife, Water, Income Tax, Land. 5. The National Oil and Gas Policy, 2008 Previously used the Energy Policy, 2002 to guide promotion of Petroleum Exploration, Capacity building and monitoring of activities of licensed companies. 13Petroleum Exploration and Production Department THE NATIONAL OIL AND GAS POLICY FOR UGANDA Policy Goal: “To use the country’s oil and gas resources to contribute to early achievement of poverty eradication and create lasting value to society.”  Policy has ten objectives, each with strategies and actions.  Approved in February 2008 after an extensive consultative process.  Policy available in print and website; 14Petroleum Exploration and Production Department 7
  8. 8. Status of Policy Implementation (2008 to 2011)1. Efficient Licensing – Objective 1  On-going formulation of new petroleum legislation – 2011/12  Halt in licensing of new acreage since first discovery in 2006.  Over 10,000 km2 of area with high productive potential have been relinquished in addition to available unlicensed areas.  Many applications received are kept in data bank.  Measured licensing as a way of prolonging production.2. Establish and Manage Country’s Resource Potential – Objective 2  National Petroleum Data Repository under establishment.  Creation of new institutions (Petroleum Authority, National Oil Company, Directorate of Petroleum)  Strengthening existing institutions 15Petroleum Exploration and Production Department Status of Policy Implementation (2) 3. Efficient production – Objective 3  No commercial production yet.  Government has received: a) Applications for production licences over Waraga, Nzizi, Mputa and Kingfisher fields. b) Field development plan for Kasamene, Wahrindi, Kigogole, Nsoga, Ngege and Ngara. 4. Valuable utilisation of the resources – Objective 4  A comprehensive feasibility study for in country refining undertaken with positive results.  Processes for refinery development are on-going; FY 2011/12 – undertake RAP  Commence selection of partners in Refinery Development.  Crude oil from EWT and gas from Nzizi Discovery to be used in power generation. 16Petroleum Exploration and Production Department 8
  9. 9. Status of Policy Implementation (3) 5. Promotion of suitable transport and storage solutions – Objective 5  A petroleum transportation and storage study for the country has commenced.  Shall cover both crude and products transportation and storage. 6. Collection of the right revenues and utilisation to create lasting value– Objective 6  Existing Revenue Management Policy reviewed.  Tax legislation updated and Macro-Economic Framework is being revisited.  Capacity Building in tax policy/ administration and Petroleum Fund Asset Management.  Resolution of tax dispute on the sale of Heritage assets is an example of an effort to ensure collection of right revenues 17Petroleum Exploration and Production Department Status of Policy Implementation (4) 7. Optimum national participation – Objective 7  Concluded a study on the opportunities and challenges for Ugandans’ participation in the oil and gas sector in September 2011.  Plan is to put in place a strategy for its implementation.  Copy of the study is on  Some aspects of local content have been included in the petroleum resource bill. 8. Development and Maintenance of National Expertise - Objective 8  Skills requirement study for the oil and gas in the country is being undertaken  Commencement of Uganda Petroleum Institute Kigumba artisans and technicians together with undergraduate and post graduate studies in petroleum geoscience at Makerere University  Increased training of Ugandans in oil and gas professions abroad for both public and private players 18Petroleum Exploration and Production Department 9
  10. 10. Status of Policy Implementation (5)9. Environment Conservation – Objective 9  Environment Impact Assessment Studies undertaken  Environment Sensitivity Atlas for the areas where petroleum has been discovered in the country was developed.  Strategic Environment Assessment of these areas is on-going.  Oil spill Contingency Plan and mechanism for hazardous waste management plan is on-going.  Multi-Institutional monitoring team - Biodiversity Institutions working together to efficiently manage the interface between petroleum and the environment.  Updating of standards and regulations 19Petroleum Exploration and Production Department Status of Policy Implementation (6)10. Mutually beneficial relationships among stakeholders- Objective 10  A communication strategy for the sector has been developed and Implementation is on-going.  Consultations and dialogue with stakeholders continues 1. Engagements with Civil Society, Parliament and other stakeholder groups 2. Engagements with leaders and communities in the Albertine Graben 3. Participation in Radio and Television talk shows 4. Media Relations 5. Website 20Petroleum Exploration and Production Department 10
  11. 11. 5. CONCLUSION 1. Petroleum exploration has been on-going in Uganda for over 90 years. 2. Exploration efforts have led to the discovery of over 2.5 billion barrels of oil in place in the country and this is expected to increase. 3. The National Oil and Gas Policy is the key policy document guiding the developments in the sector. 4. Implementation of the policy is on-going; all stakeholders need to carryout their roles. 5. Government is committed to working with all stakeholders to ensure effective and efficient development of the sector to benefit all Ugandans. 21Petroleum Exploration and Production Department Thank You Further Information; COMMISSIONER PETROLEUM EXPLORATION AND PRODUCTION DEPARTMENT 22Petroleum Exploration and Production Department 11