PROGRESS OF PETROLEUM EXPLORATION AND DEVELOPMENT IN UGANDAcsco.ug/files/downloads/PEPD Presentation...

PROGRESS OF PETROLEUM EXPLORATION AND DEVELOPMENT IN UGANDA

Presented by

GLORIA SEBIKARI, SENIOR COMMUNICATIONS OFFICER

PETROLEUM EXPLORATION AND PRODUCTION DEPARTMENT

DIALOGUE WITH CIVIL SOCIETY ORGANISATIONS

“Enhancing Environment Compliance in Uganda’s Oil and Gas Sector

22nd JULY 2014

MINISTRY OF ENERGY AND MINERAL DEVELOPMENT

THE REPUBLIC OF U GANDA


© Petroleum Exploration and Production Department, Uganda 2

1. Introduction

2. Status of the Sector

3. Policy, Legal, Regulatory and Institutional Framework

4. Commercialisation plans

5. National Participation

6. Environment management

7. Conclusions

PRESENTATION OUTLINE


© Petroleum Exploration and Production Department, Uganda

1. INTRODUCTION 3

1.1 PETROLEUM POTENTIAL: UGANDA’S SEDIMENTARY BASINS

Albertine Graben

1

Hoima Basin

Lake Kyoga Basin

Kadam-Moroto Basin

Lake Wamala Basin

Lake Victoria Basin

Lake Edward

Lake George

LAKE VICTORIA

Lake Wamala

HOIMA BASIN

LAKE VICTORIA BASIN

LAKE WAMALA BASIN

LAKE KYOGA BASIN

KADAM-MOROTO BASIN

LAKE KYOGA

Sedimentary Basin in Uganda (Source: PEPD)

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SOUTH AFRIC

A

ZAMBIA

D.R

.C

SUDAN

ETHIOPIA

LIBYAALGERIA

NIGERIA

IV. C

OAST

ANGOLA

NA

MIB

IA

MA

DA

GA

SC

AR

MALI

2

3

MOST PROSPECTIVE

UNDER INVESTIGATION

OTHER BASINS



• Four (4) Active Production Sharing Agreements (PSAs)

• 3 License Operators (Tullow, TOTAL and CNOOC)

• Change from small oil companies to super independent and major oil companies

2.1 ACREAGES/LICENCES

2. STATUS OF THE OIL AND GAS SECTOR

HERITAGE HARDMAN NEPTUNE DOMINION ENERGY AFRICA


2.2 RESOURCE BASE

STATUS OF THE OIL AND GAS SECTOR

21 oil and/or gas discoveries made in the Albertine Graben

17 fields taken forward for appraisal

Appraisal for 13 of the discoveries completed, and applications for production license submitted

One Production Licence (Kingfisher) approved during September 2013

Appraisal of the remaining 4 discoveries still ongoing and is expected to be completed by end of 2014

116 exploration and appraisal wells drilled

102 encountered hydrocarbons

Over 3.5 billion barrels of STOIIP established

Over 1.2 billion barrels of recoverable petroleum resources

Over 80% of the Albertine Graben is unlicensed Discoveries in the Albertine Graben (Source: PEPD)


STATUS OF THE OIL AND GAS SECTOR (2)

6

Appraisal Areas in the Albertine Graben (Source: PEPD)

TOTAL E&P Uganda B.V

• Appraising of four discoveries in EA1 and 1A • Submitted application for Production Licence

for 3 fields (Ngiri, Jobi-Rii)

Tullow Uganda Operations Pty Ltd

• Submitted application for Production License and FDPs for nine discoveries in EA2

CNOOC Uganda Ltd

• Field Development Plan and Production License for the Kingfisher Field approved during 2013

• Commencing development

2.3 STATUS OF UPSTREAM ACTIVITIES

© Petroleum Exploration and Production Department, Uganda © Petroleum Exploration and Production Department, Uganda 7

3. POLICY, LEGAL, REGULATORY AND INSTITUTIONAL FRAMEWORK

The National Oil and Gas Policy (2008)

Available on: www.petroleum.go.ug

NATIONAL OIL

AND GAS

POLICY

PETROLEUM

LEGISLATIONS

PETROLEUM

REGULATIONS PSA

POLICY

LAWS

• The Petroleum (Exploration, Development and Production) Act, 2013

• Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013

• Formulation of a Bill for the management of petroleum revenue (The Public Finance Bill) and the Bill is currently in Parliament

• Other relevant statutes and guidelines such as Environment , Wildlife, Water, Income Tax, land

• Petroleum (Exploration and production) (Conduct of Exploration Operations) Regulations, 1993

• New Petroleum Regulations expected in 2014 to address Exploration, Development, Production, HSE, NC among others

REGULATIONS

3.1 REGULATORY FRAMEWORK

© Petroleum Exploration and Production Department, Uganda © Petroleum Exploration and Production Department, Uganda

3.2 INSTITUTIONAL FRAMEWORK

Based on three critical pillars

• Resource - Ministry of Energy and Mineral Development - Petroleum Exploration and Production Department

• Environment – MWE, NEMA, UWA, DWRM, NFA, MLHUD, MAAIF

• Revenue – MFPED, URA, BOU, AGO, OAG

District Local Governments

Government Ministries, Agencies and Departments recognised in the NOGP (MoJCA, MoGLSD, MIA, UIA etc)

Other Stakeholders; Oil Industry, Development Partners, Civil Society, Media, Academia etc.

8

POLICY, LEGAL, REGULATORY AND INSTITUTIONAL FRAMEWORK

© Petroleum Exploration and Production Department, Uganda © Petroleum Exploration and Production Department, Uganda 9

POLICY, LEGAL, REGULATORY AND INSTITUTIONAL FRAMEWORK

Policy and Licensing

MINISTRY OF ENERGY

(DIRECTORATE OF PETROLEUM)

PETROLEUM AUTHORITY

Regulation of the oil and gas sector

Commercial and Business interest of the state

NATIONAL OIL COMPANY

MINISTRY OF ENERGY AND

MINERAL DEVELOPMENT

(PEPD)

Policy, Licensing, Regulation, Commercial



4. COMMERCIALIZATION PLANS

SHORT TERM

Use of crude oil and gas for power generation

MEDIUM TERM

Phased development of a 60,000 BOPD refinery

Commercialization of gas produced

Development of a crude oil export pipeline

LONG TERM

Potential expansion of the refinery

Development of petrochemical and energy-based industry



4.1 REFINERY DEVELOPMENT; PROGRESS

Acquisition of 29 sq.KM of land in Kabaale, Buseruka Subcounty, Hoima for refinery development through implementation of a Resettlement Action Plan (RAP)

Environment baseline survey has been completed

A Transaction Advisor (Taylor DeJongh from USA)is supporting the structuring of the refinery development and source a lead investor.

Refinery to be developed on a PPP basis

11

COMMERCIALIZATION

RFQ issued in October 2013 and six firms and/or consortia shortlisted, four responded to RFP and two shortlisted for negotiations.

SK Group and RT-Global Resources to present Best and Final Offers by end of Aug 2014.

The first phase of the refinery (30k bopd) expected in 2017/18 and 60Kbpd two years later.



• Studies for crude pipelines to the refinery and pipelines to evacuate the products from the refinery has commenced

• Crude Transportation Pipeline to refinery

Two routes (Northern and Southern) were identified

Northern route: 97km, 16-inch and,

Southern route: 46km, 12.5 inch

Cost of pipelines estimated at $185M

• Refined Products Pipelines from Refinery

1. A 205km long, 10 inch diameter pipeline

Distribution by trucks from Buloba to different demand centers

Cost of pipeline estimated at $307M

Proposed to be developed as part of refinery project

• Infrastructure to support development of the refinery and the oil fields is being put in place.

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Buhaguzi

Buliisa

Bugahya

Bujenje

Nwoya

Kiboga

PadyereJonam

Okoro

Buruuli

Bugangaizi

Buyaga

Buruuli

Madi-Okollo

Buyaga

Kibanda

HOIMA

NEBBI

31°30'0"E

31°30'0"E

31°15'0"E

31°15'0"E

31°0'0"E

31°0'0"E

30°45'0"E

30°45'0"E

2°3

0'0

"N

2°3

0'0

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2°1

5'0

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2°1

5'0

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2°0

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2°0

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1°4

5'0

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1°4

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1°1

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µ

0 6 12 18 243Kilometers

U G A N D AU G A N D A

PROPOSED REFINERY INFRASTRUCTURE

D . R . C O N G OD . R . C O N G O

Legend

"" TOWNS

Central Processing Facilities

NAME

") CPF Kaiso-Tonya

") CPF North 1

") CPF North 2

") CPF South

PROPOSED PIPELINE ROUTE

Southern Route 1

Southern Route 2

Northern Route 1

Northern Route 2

! STS

Proposed Refinery Land

County Boundary

Oil Discovery

International Boundary

Airstripp

Water Body

Licensed Areas

COMMERCIALISATION

4.2 PIPELINES DEVELOPMENT



Refined Products Pipelines(Cont’d)

2. Eldoret-Kampala (Buloba) Pipeline

Feasibility study Recommended

A 325km long, 12 inch pipeline

3. Kampala-Kigali Pipeline: Feasibility study is being undertaken.

Crude Export Pipeline

Three possible routes were evaluated

Northern route to Lamu Port in Kenya, 1380km long

Central route to Mombasa, 1300km long

Southern route to Dar es Salam, 1950km long

The actual sizing of pipeline and detailed routing are being studied

Integrated infrastructure Development including regional discussions on joint infrastructure devt are ongoing

COMMERCIALISATION

PIPELINES DEVELOPMENT



5. NATIONAL PARTICIPATION

14

Concluded a study on the opportunities and challenges for Ugandans’ participation in the oil and gas sector in September 2011. Copy of the study is on www.petroleum.go.ug

Recommendations of the study are under implementation

Development of a National Content Policy and Plan (draft is under discussion).

Establishment of a National Content section in the Department

Mobilization of local service providers; Association of Uganda Oil and Gas Service Providers

Regulation of expatriates; through work permit system.

Approval of organisation structures for oil companies.

Requirement to develop Nationalisation Plans for expatriate positions.

Streamlining the procurement procedures for oil companies.

PSAs provide for State Participation at 15% to 20%.

Several aspects of national participation have been legislated.

Capacity Building and Skills development with an emphasis on Vocational Skills Devt.



Employment of Ugandans

Local Enterprise Development

Measurement and Monitoring of

National Content

Enhancement of Vocational and

Higher Education training

Procurement of Local goods & services National

Content Development

5.1 Pillars of the National Content Policy

NATIONAL CONTENT POLICY (DRAFT)



5.2 Objectives of the Policy

THE NATIONAL CONTENT

POLICY

3. Develop the capabilities of Uganda

based firms as suppliers.

1. Build the capabilities of Ugandan human resources to

effectively participate in petroleum operations

2. Promote the use of locally manufactured goods and services in the petroleum sector.

4. Establish a transparent monitoring and reporting system to

assess achievements

NATIONAL CONTENT POLICY



5.3 The interaction between several stakeholders is therefore key

NATIONAL CONTENT POLICY

National

Content

Education sector

Oil Companies

Oil Service companies

Local Private Sector

Government

Financial Sector

The draft national content policy and plan will be finalised by end of 2014 and it will be presented to stakeholders.



1. Right policies

• NOGP recognises importance of environment and biodiversity protection and

prescribes key strategies and actions to achieve this

2. Clear laws, regulations, guidelines and standards

• Environment laws and statues are respected and adhered to

• Update of critical laws, regulations and guidelines is ongoing

3. Strong institutions

• Creation of Oil and Gas units in Environment and Biodiversity Institutions

4. Qualified and skilled personnel

• Continuous Capacity building is undertaken

5. Effective monitoring and supervisory strategy

• Multi Institutional monitoring efforts

• Inspections and Audits are undertaken.

18

6. ENVIRONMENT MANAGEMENT



Enforce compliance with all applicable laws, regulations and

standards.

Ensure oil and gas operations are undertaken in a safe manner and

protect the environment and biodiversity

Ensure that incidents (accidents and near misses), are reported,

investigated and addressed.

Carry out incident investigations and analysis when required

Ensure implementation of acceptable waste management practices.

Participate in development and review of regulations, guidelines and

standards

19

ROLES OF HSE UNIT

ENVIRONMENT MANAGEMENT



Daily HSE reports

Special reports from oil companies (Notices, Monthly Reports

and Quarterly Environment Monitoring Reports)

Daily operations update from the Department’s field

monitoring teams

Inspections and Audits

Regular engagements (Ops meetings, TCM & ACM)

Assessment of work plans and technical submissions (Well

proposals, Drilling program, Seismic survey plans, Field

Development Plans)

Review of EIAs and Environment Audits

20

TOOLS





Environment and Social Impact Assessment studies are undertaken and Environmental Audits

done for ALL projects

Limiting the footprint: drilling pads, access roads, camps.

Avoidance of sensitive locations

Monitoring biodiversity in liaison with the Wildlife Authority

Restoration and decommissioning of sites

Jobi-1 Mputa-2

21



SITE RESTORATION AT JOBI-1 MURCHISION FALLS NATIONAL PARK

22




7. CONCLUSIONS

23

Uganda is moving forward to join the leagues of Oil Producing Nations since exploration and appraisal has been successfully undertaken .

Sustainable and balanced development is a priority of Government; frameworks are in place to ensure that other sectors of the economy – Environment, Wildlife, Agriculture, Tourism, Manufacturing, Education etc, benefit from the emerging Oil and Gas sector.

Self-regulation - Uphold high standards of integrity to ensure genuine partnerships with Government and the people than can bring about positive change to create a better society

The National Oil and Gas Policy which is the key guiding document for development of Uganda’s oil and gas sector recognises environment protection as one of the key principles.

THANK YOU.

WELCOME TO THE 7TH EAST AFRICAN

PETROLEUM CONFERENCE AND EXHIBITION

(EAPCE)

4th to 6th MARCH 2015

KIGALI, RWANDA

www.eapce15.eac.int For Further information:

Permanent Secretary, Ministry of Energy and Mineral Development

Email: [email protected]

[email protected]/ [email protected]

www.petroleum.go.ug

mailto:[email protected]/

mailto:[email protected]

http://www.petroleum.go.ug/

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