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
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Petroleum 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
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Petroleum Exploration and Production Department
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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
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Petroleum 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 prospective
Petroleum Exploration and Production Department
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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
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Petroleum 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
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Petroleum Exploration and Production Department
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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
MOYO
1983: Acquisition of Aeromagnetic Data over the
400000N
400000N
metres
entire Albertine Graben
To Gulu
350000N
350000N
ARUA
1985: Enactment of the Petroleum Exploration and International boundary
300000N
300000N
Production Act
Roads
Lakes NEBBI
250000N
250000N
PARAA
1991: -Formation of PEPD
-PSA between Fina Exploration Uganda b.v and
200000N
200000N
MASINDI
T
B ER
AL
Government
L.
To Kampala
150000N
150000N
HOIMA
1993: Enactment of Petroleum Regulations
100000N
100000N
1997: Licensing of EA 3 (Semliki Basin), to Heritage
To Kampala
MUBENDE
FORT PORTAL To Kampala
50000N
50000N
2001: 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. EDWARD
2002 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
-96.0
2003/4; Acquisition of seismic data over Lake Albert .
-122.0
-166.0
150000S
150000S
Magnetic anomaly
(nT)
3300000E 3350000E 3400000E 3450000E 3500000E
7 3550000E
Petroleum 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
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Petroleum Exploration and Production Department
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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 CNOOC
Petroleum 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
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Petroleum Exploration and Production Department
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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
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Petroleum 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)
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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.
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Petroleum 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;www.petroleum.go.ug
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Petroleum Exploration and Production Department
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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
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Petroleum 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.
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Petroleum Exploration and Production Department
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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 17
Petroleum 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 www.petroleum.go.ug
 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
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Petroleum Exploration and Production Department
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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
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Petroleum 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 www.petroleum.go.ug
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Petroleum Exploration and Production Department
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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. 21
Petroleum Exploration and Production Department
Thank You
Further Information;
COMMISSIONER
PETROLEUM EXPLORATION AND PRODUCTION DEPARTMENT
pepdebb@petroleum.go.ug
www.petroleum.go.ug 22
Petroleum Exploration and Production Department
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