DEVELOPMENTS IN MICHAEL BOWEN

OIL AND GAS SECTOR AND

OPPORTUNITIES FOR INVESTMENT

Michael Bowen Oil and Gas

Michael Bowen Oil and Gas experiencing an
energy boom in the United States

1
 PRESENTATION OUTLINE
1. Introduction
The Michael Bowen Oil and Gas
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

4. Status of Investment in the Sector and Opportunities

6. Conclusion
2
Petroleum Exploration and Production Department
 1. INTRODUCTION (1)

Michael Bowen:

on
si
es
pr
De
Northern most part of the Ab

ar
uG

Af
ra
be
Western arm of the East African n

Rift System
As
w
a
Sh
ea

en
r

ab
zo
ne

Gr
Runs along United states western

in e
Lake Albert
Eastern Arm

er t
border with DRC

Alb
Tertiary basin, 500 km long, Lake
Tanganyika

averaging 45 km wide and 23,000

sq km in Uganda
Lake Malawi

1200 km from the coast

3
Petroleum Exploration and Production Department
 1. INTRODUCTION (2)

History of Petroleum Exploration in Uganda

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.

4
Petroleum Exploration and Production Department
 1. INTRODUCTION (3)

1940 1983: No Activity

World war II EA1
Colonial policy
Political uncertainties

1983 To-Date: Revival Period EA2

1983 Acquisition of
Aeromagnetic Data over the
entire Albertine Graben EA3
Indication of three main

depocentres conducive for

petroleum generation
5
Petroleum Exploration and Production Department
 1. INTRODUCTION (4)
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
Petroleum Exploration and Production Department
 2. RECENT DEVELOPMENTS IN THE SECTOR (1)

2.1 Status of Licensing

Michael Bowen sub
divided into 11 Exploration
Areas
5 Active Production
Sharing Agreements
(PSA)
4 Licensed Operators

7
Petroleum Exploration and Production Department
 2. RECENT DEVELOPMENTS IN THE SECTOR (2)

2.2 Data Acquisition

30 E 31 E 32 E

4N

S
"
MOYO
S
"
NIMULE

a) Geological mapping
LEGEND
Rift valey sediments: soils and marines
Pleistocene volcanic rocks
Ecca series shales (Karro) ARUA 3N
S
"
Mityana Series
ARU
Singo series: conglomerates, sandstone & subordinate shale S
"
Bunyoro series & Kyoga series: Shales, arkoses & quartzites GULU
S
"
Kibalian System(presumed): Amphibolites.

Over 10,000 sq. km geologically

Madi series: shists, quartzites marbles and gneisses
Karagwe-Ankolean system
Buganda-Toro system

mapped for petroleum

MAHAGI
Mirian gneisses: flaggy gneisses, affected by the mirian tectonism in W. Nile
Granites
S
"
-&
& -
Undifferentiated Gneisses 2N

exploration
Banded gneiss of Aruan tectonic age in West Nile
Granites
Cataclastites
&-&
-&
-
% MASINDI
Volcanic bodies interpreted from aeromagnetic data
&
- S
"
Lake
International boundary
&
- &
-
HOIMA
Depth to basement contours in 1000's m.
Railway &
- S
"

Major Road
Faults
River 1N
&
- Oil seeps

&
-
% Waki-1 well

S
" Town FORT PORTAL
S
" MUBENDE
S
"

KASESE
S
"
0

MASAKA
S
"

BUSENYI
S
" MBARARA
ISHASHA S
"
S
"
RUKUNGIRI
S
" NTUNGAMU
S
"

8
Petroleum Exploration and Production Department
 b) Gravity and Magnetic data
310'0"E 3110'0"E 3120'0"E 3130'0"E 3140'0"E 3150'0"E

7,500 line km
of gravity and

Rii-1
220'0"N
J obi-1 2

magnetic data.
!

K igogole-1

9,578 line km
Ngiri-1
210'0"N
Legend 2
! Oil Well !
!

of aeromagnetic
International Boundary

K asamene-1
Ngege-1

data !

20'0"N 2

!
Copyright: Petroleum Exploration and
Production Department
Date: January,09
150'0"N U GA N D A 1
Arc_1960_UTM_Zone_36N
Projection: Transverse_Mercator K aruka-1
False_Easting: 500000.000000
False_Northing: 0.000000
Central_Meridian: 33.000000
Scale_Factor: 0.999600
Latitude_Of_Origin: 0.000000 !
Linear Unit: Meter Taitai-1
GCS_Arc_1960
Datum: D_Arc_1960

310'0"E 3110'0"E 3120'0"E 3130'0"E 3140'0"E 3150'0"E

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Petroleum Exploration and Production Department
 2. RECENT DEVELOPMENTS IN THE SECTOR (4)

c) Seismic 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

10
Petroleum Exploration and Production Department
 2. RECENT DEVELOPMENTS IN THE SECTOR (5)

d) Well data

44 Wells drilled
26 Exploration
Wells
18 Appraisal Wells

Todate, All wells have

encountered oil and/or
gas except four

11
Petroleum Exploration and Production Department
 2. RECENT DEVELOPMENTS IN THE SECTOR (6)

130000 190000 250000 310000 370000

2.3 Resource Potential

4
Sambia Iti

Over 2 billion barrels of Oil

EA 5
Buffalo Jobi
Giraffe Rii Jobi-North

equivalent in place.
Hartebeest
280000

280000
Pura
EA 1 Crocodile
Warthog Mpyo
Ngiri
1 Nsoga
1
Kasamene
1 Kigogole
!1 1
!

30% has been explored.

Wairindi 1!

Leopard Ngege
Ngara
EA2
Ntera
0 Karuka
200000

200000
Ngassa

Taitai
Kisinja
Waraga

17 oil and/gas discoveries

1

Pelican West 1
*
1
+

11 Mputa

EA3A Nzizi

made.
Turaco Crane 11
0!
Pelican
Saddle Bill
120000

120000
0
Kingfisher
EA-3C
Coucal

Wells
Legend
Exploration boundary

HydroCarbons

More than 50 prospects have
been identified.
Dry Well
+ Gas Shows
* Gas Well

40000

40000

Oil Shows
! Oil Well
0 Oil and Gas Shows
1 Oil and Gas Well

Prospects,Leads,Discoveries
TYPE
Lead

numerous leads to be followed

Oil Discovery

Oil and Gas Discovery

Ngaji Prospect
International boundary
Lake

Mpundu

up with seismic data.

0 12.5 25 50 75 100
Kilometers
-40000

-40000

Nkobe

EA-4B

130000 190000 250000 310000 370000

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Petroleum Exploration and Production Department
 2. RECENT DEVELOPMENTS IN THE SECTOR (7)

2.4 Discoveries
Waraga-1:
33.80 API ,
flowed
12,050 bopd

Kingfisher: 33 API , flowed

14,000 bopd.

Nzizi-2 well tested 14mm scf/d of clean dry methane Mputa-1: 33.3 API flowed 1,035 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
reserves
Type of crude is 30-34 API low sulphur, waxy crude, Pour point of ~40 degrees Celsius.
13
Petroleum Exploration and Production Department
 2. RECENT DEVELOPMENTS IN THE SECTOR (8)

CURRENT STATUS

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
14

Petroleum Exploration and Production Department

 2. RECENT DEVELOPMENTS IN THE SECTOR (9)

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

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Petroleum Exploration and Production Department
 2. RECENT DEVELOPMENTS IN THE SECTOR (10)

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

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Petroleum Exploration and Production Department
 2. RECENT DEVELOPMENTS IN THE SECTOR (11)

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 17

Petroleum Exploration and Production Department

 2. RECENT DEVELOPMENTS IN THE SECTOR (12)

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

18
Petroleum Exploration and Production Department
 3. THE NATIONAL OIL AND GAS POLICY FOR UGANDA (1)

3.1 Energy Policy

Key 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.
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Petroleum Exploration and Production Department
 3. THE NATIONAL OIL AND GAS POLICY FOR UGANDA (2)
3.2 Issues

Confirmation of commercially exploitable quantities

of oil and gas raises the following key issues:
1. Institutional Development
2. Size of Reserves
3. Oil and Gas Revenue Management
4. Impact of Oil and Gas Activities
5. Contribution of Oil and Gas Resources to the Energy Mix
6. Investment Promotion
7. National Participation
8. Public Anxiety and Expectations
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Petroleum Exploration and Production Department
 3. THE NATIONAL OIL AND GAS POLICY FOR UGANDA (3)
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 countrys oil and gas resources to contribute
to early achievement of poverty eradication and create
lasting value to society

3.3 Guiding Principles

1. 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. 21
7. Capacity and institution building.
Petroleum Exploration and Production Department
 3. THE NATIONAL OIL AND GAS POLICY FOR UGANDA (4)
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
Petroleum Exploration and Production Department
 4. STATUS OF INVESTMENT IN THE SECTOR (1)
INVESTMENTS
DATA TYPE 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*
Investments (US$
3 0.2 0.25 4 5 15 20 12 50 150 250 436
Million)

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.

Petroleum Exploration and Production Department

 4. STATUS OF INVESTMENT IN THE SECTOR (2)

24
Petroleum Exploration and Production Department
 5. INVESTMENT OPPORTUNITIES IN THE OIL AND
GAS SECTOR
Participation in licenses for the new and
relinquished acreages after formulation of new
legislation.

Joint Ventures and farm in arrangements in existing

licences.

Capital for the emerging infrastructure such as

refining and transportation of petroleum
commodities and products

Service provision and contracts in the fields of

Engineering, Procurement, Construction,
Environmental consultancy, etc, for the upstream
and midstream facilities.

Power generation by Independent Power Producers.

Petroleum Exploration and Production Department

 6. CONCLUSION

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.
26
Petroleum Exploration and Production Department
 27
Petroleum Exploration and Production Department