Date post: | 17-Jul-2016 |
Category: |
Documents |
Upload: | african-centre-for-media-excellence |
View: | 133 times |
Download: | 6 times |
Tullow Oil Uganda CREATING SHARED PROSPERITY IN UGANDA Muhumuza Didas – Senior Social Performance Advisor
September 19th 2014
Oil & Gas Development in Uganda
Agenda
Tullow overview
Oil and gas value chain
Opportunities for Ugandans
Shared challenges
Shared responsibility and prosperity
Slide 2
Slide 3
2004 Tullow entry into Uganda
84% Exploration success
rate
64 # of wells drilled to date
1.7 bn Barrels of recoverable oil
resources
$2bn Invested in Uganda to date
550 No. of local service providers since
2008
$200m Spent with Ugandan Service providers
between 2008 -2012
30 Ugandan trainees abroad
62 Ugandans on Tullow funded
trainings and scholarships (USD 60,000 @)
150,000 Jobs to be created
88% Ugandan employees
$12-15bn estimated investment required
3 partners
Tullow Uganda by Numbers …
Progress to date and Project Completion Outlook
Exploration & Appraisal Phase completed
Discoveries: 3.2billion barrels in reserves, of which 1.7 billion are recoverable
Now entered the Development Phase, approx. 5 years:
First 2 years: Production Licenses, Front End Engineering Design studies, Costing, Land Access Programme, IFC-PS compliant ESIA, NEMA approvals, Logistics and Infrastructure Planning, National Content Capacity Building, Financial Planning, Final Investment Decision
Then approx. 3 years Execution Procurement and Construction Contract
Approx. 5 years to First Oil with a 20-year Production Phase
Potential net value for government of approximately US$50bn over 20 years
4
Slide 5
& Exploration
Appraisal
Field operations
Field abandonment
Pre-project Project
production profile
Time
Discovery End of production
Restored Site
“First Oil”
Development Studies
Preliminary
Conceptual
Prospect
Field Development
Exploration to Production: A Long Term Process
Slide 6
With the Signing of the Commercial Framework MOU, the route to Market for the Lake Albert Resources is now clear
Sales into the international Crude Oil Market
Sales into the Local Oil Product Market
Sales into the Local Power Market
Flow of Revenue from the Market
UPSTREAM DEVELOPMENT
REFINERY
EXPORT PIPELINE
EXPORT TERMINAL
LOCAL MARKET
POWER GENERATION
UPSTREAM USD8-12 bln
30- 60Kobd USD2-3 bln
USD3-4 bln
Slide 7
Development Studies : A Multi Disciplinary Activity
Slide 8
Project execution – Getting to First Oil
Slide 9
Buliisa Area
75% of resources
175,000 bpd process plant South of Nile
Kaiso Tonya Area
10% of resources
10,000 - 20,000 bpd process plant below the
escarpment
Kingfisher Area
15% of resources
45,000 bpd process plant at Kingfisher
No offshore facilities (sub-lake extended reach wells)
Integrated Basin Wide Development Plan
executed by the 3 Operators
Optimises sharing of facilities, project costs
and accommodates future Lake Albert
exploration success
Maintains environmental bio-diversity and
integrity, promotes corporate social
responsibility, contains national
content strategy
Lake Albert development concepts
Slide 10
• Due to the waxy oil properties of the crude and the environment crossed by the pipeline (Rift, mountains, rivers), the pipeline design is complex and requires heating . It has to be well matched to the oil properties and the environment to allow safe and reliable crude transport, 1,200-1,400km to the Indian Ocean, across two countries
•Lake Albert Partners started pipeline concept studies in 2012 and pre‐feed studies in 2013.
•Numerous agreements involving Governments, crude shippers and shareholders are required to launch such a project. The upstream development and the oil export pipeline will require a coordinated Final Investment Decision (FID)
Challenges of the Lake Albert Development
Land access
Basin-wide ESIA
IFC Performance Standards Compliance
Road infrastructure
National Content in Jobs and Contracts
Project Economics
Project Timelines
11
Challenges of the Lake Albert Development
Industrial Base Line
Survey in Uganda
12
Oil Industry Needs
Supply and Demand Study
World Bank
French Embassy
Chinese Embassy
UN
Almost 100 meetings and interviews have been done
Companies visited/ interviewed
Education
Partners
Transportation (Goods) – 4
Transportation (People) – 1
Generic waste management – 2
Manpower agency – 2
Civil construction services – 2
Cement manufacturing – 2
Hazardous waste management – 1
Technical consultancy – 2
Facility management – 3
Construction steel – 3
Mechanical construction – 2
Catering – 1
Certification – 3
Bulky material – 1
Domestic airline – 1
Retail – 1
PPE – 2
Road construction – 1
Food supply – 1
Security – 1
Light iron/ steel products – 5
Light equipment – 1
Fuel wholesale – 2
Banks – 2
Other sectors - 2
CNOOC
C&P, Engineering specialists
TOTAL
LADPG, GAPI, C&P Uganda, Legal, Logistics, CSR, Downstream, E&P Training TDR, Total Consulting
TULLOW
Operations, Training manager, Engineering specialists, C&P Uganda
Universities
Makerere University
Kyambogo University
Technical Institutes
Nakawa Vocational Institute
UPIK*
Government - Education
BTVET (and UGAPRIVI)
MOES
DIT
NCHE
NCDC
UIPE
Associations
PSFU - 2
AUOGS - 6
UMA - 2
USSIA - 1
UNABCEC - 1
FUE - 1
Ugandan Insurers Association - 1
International organization
PEPD
UBOS
UIA
Governmental bodies
Supply survey results
~200 filled questionnaires returned
Source: *Meeting held in Kampala with UPIK’s management 13
MAPPING OF SELECTED INDUSTRIES ON BENEFITS-FEASIBILITY MATRIX
Industries related to oil & gas projects in Uganda have been classified in terms of potential for local content development
Green and Yellow areas are opportunities for Ugandan suppliers and insurers
14 Source: SBC analysis
Note: Industries within quadrants are not evaluated relatively to each other
Feasibility
Cement
manufacturing
Bulky
construction
materials
Construction
steel
manufacturing
Site safety
and security
Facility
Management
Civil construction
services
Generic waste
management
Hazardous waste
management
Transportation &
Logistics (Goods)
Fuel
wholesale
Manpower
agency
Technical
consultancy
Food
supply
Catering
Light equipment
manufacturing
Domestic Airline
Services
Road
construction
Transportation
(People)
Work safety
products
High
Low
Complex Easy
Production
operation services
Furniture
manufacturing
Vendor and
representation
services
Mechanical
construction
services
GMS Light iron/steel
products Oil/Water
pipe
installation
Pipe
steel
Petrochemical
(refinery)
Fertilizer
Machinery and
heavy equipment
manufacturing
Drilling
services
Drilling
supplies
Oilfield
Services
Oilfield equipment
manufacturing
Drilling
Equipment
Oilfield
chemicals
Cement
additives
O&G specific
emergency
services
Engineering
consultancy
Benefits
Blue area
industries
will be
addressed
through
steps on
education
Host: 7766927#
Cumulative number of people required to build and operate LA projects on site. Operations of this scale represent opportunities for local insurers
MANPOWER SPLIT BY DEVELOPMENT PHASE
Manpower required to develop and operate LA projects ranges from almost 13,000 workers at peak to 3,000 people in operations
Source: SBC analysis; CNOOC; Total; Tullow 15
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
202820152014 2026 20302029202720172016 2021 202220182013 20252019 2023 20242020
Construction (infield facilities)
Drilling
Production Operations
Refinery - operations
Refinery - construction
Transportation (from outside of LA)
Export pipe
CONCEPTS OF DIRECT, INDIRECT AND INDUCED JOBS GENERATED BY OIL & GAS PROJECTS, REGARDLESS OF THE NATIONALITY OF THE PEOPLE
Total new jobs generated in Uganda by LA oil development projects may be in the range of 100,000 to 150,000
16
Source: SBC research on “stand alone” oil and gas cities (Stavanger - Norway, Aberdeen - UK, Macaé – Brazil, Trinidad & Tobago)Note: *Number of jobs created was computed as peak of manpower (13,000) for LA projects. ±15% was added to
account for uncertainty**Ratio direct to indirect varies in the range of 2.3 - 3.8 depending on geography***Ratio direct to induced varies in the range of 6.6 - 8.4 depending on geography
100,000
x2.3** 35,000
x6.6***
Total new jobs
150,000
InducedIndirectDirect*
15,000
11,000
INDUCED
INDIRECT
DIRECT70,000
105,000
25,000
ESTIMATE
~
~
~
~
~
~
Min / Max
The survey reveals a substantial gap of supply over future projects’ demand for transport & logistics of goods
INDUSTRY SUPPLY & DEMAND ANALYSIS
Trucks for bulky material capacity – 15m3
Trailer for equipment capacity – 20 tons
Truck for food – 20 tons
Rotation time – 15 days (for export pipe construction – 7 days)
O&G Producers Land transportation safety recommended practice: n° 365, revision 1.1+Guidance Note 6
At least ISO 9001
QUALITY ASSUMPTIONS ON DEMAND
Most trucks not in line with Oil & Gas standards
Around only 200 trucks (~7% of total fleet) in line with Oil & Gas standards
DEMAND SUPPLY
Extract for illustration: Transportation & Logistics (Goods)
17
Demand & supply of trucks *
# of trucks per month
0
1,000
2,000
3,000
4,000
5,000
202920272025202320212019201720152013 2018 20222016 20202014 2026 20282024
Karuma Dam Incremental Demand*
LA Projects Incremental Demand
Gap: 80+%
Range of today’s supply (+/- 10% )
Gap: 660%***
Oil & Gas industry compliant trucks
Oil & Gas Industry Compliant Supply
Some of Local Content high-potential industries have a high probability to be imported if no actions is taken
QUALITY-QUANTITY GAP MATRIX
18
Source: SBC analysisNote: Industries within quadrants are not evaluated relatively to each other
*Consultancy for land and boundary surveying activities, hydrologic surveying activities, projects involving civil engineering, hydraulic engineering, traffic engineering, water management projects, etc.
Note: Detailed
definition of each
industry is provided in
the Appendix
Hazardous waste management
Light equipment manufacturing
Work safety
products
Production
operation services
Bulk
construction
materials
Reinforcement steel
manufacturing
Security
Fuel
wholesale
Domestic Airline
Services
Light iron/steel
products
Transportation
(People)
Mechanical
construction services
Civil construction
services
Transportation &
Logistics (Goods)
Cement
manufacturing
Generic waste
management
Catering
Facility
Management
Technical
consultancy*
Food
supply
Road
construction
Furniture
manufacturing
Vendor and
representation
services**
GMS
Manpower
agency
Local manufacturing
High probability of import
Quality
Gap
Quantity
Gap
Far below
standards
Meeting
standards
<10%Future Gap
>100% of current supply
Approaching
standards
10%-100%
• Unlocking these resources requires huge investments
• Key opportunities for local and foreign suppliers to partner
• This Project can transform the Uganda economy forever by contributing to its development into a middle income country
• LA development has several major challenges to address
• Timing is critical to maintaining Uganda’s first mover advantage
• Tullow + JV Partners investing in the long-term development of the oil industry in Uganda.
• In doing so we Create Shared Prosperity for our business and for Uganda
19
In Summary ..
Thank You, Q and A
20