Uganda’s latest exploration successes could be positive sign

Jun 05, 2006 02:00 AM

by Edris Kisambira

The long-held view that oil prospects in Uganda are a mirage may soon find no place because latest developments in exploration activities indicate the real prospect that Uganda could soon join the club of oil exporting countries on the continent.
A ministry of energy official told an energy meet in Kampala recently that a carbon dioxide free oil well has been discovered at Mputa II, Kaiso-Tonya on Lake Albert by Hardman Oil and Gas Company of Australia.

Mr Ernest Rubondo, the assistant commissioner in charge of petroleum in the Ministry of Energy, revealed that the oil contains hydrocarbons that certify its purity as the standard commercial fuel.
"The local petroleum sector is promising despite the international crisis. All indicators show that there is a chance to get commercial wells in plenty and this is encouraging," Rubondo said. Rubondo did not specify the exact time-frame when drilling will start, saying, "it is a transitory process but is being fast tracked."

This latest development is a step in the positive direction following discoveries of many oil wells in the Lake Albert region that contained carbon dioxide, which is a negative element in petroleum exploration. Carbon dioxide in oil affects its commercial viability.
Rubondo said relevant tests were conducted on May 20 and that the oil is now at appraisal level with an environmental impact assessment being done to ascertain the oil's flow in the reservoir and pipeline construction and storage.

This new discovery is likely to up activity in all the areas that have been mapped by the Ugandan government as possible oil reservoirs. Four companies have been licensed by government to drill and prospect for oil. They are Neptune Petroleum (Rhino camp basin), Heritage Oil and Gas Limited (Pakwach basin and Semliki basin) and Hardman Resources Limited and Energy Africa (Lake Albert basin).
The four companies are exploring Waraga I, Turaco I, Turaco II, Turaco III, Mputa I and Mputa II as the current oil exploration sites. Turaco III is at appraisal level and the government has injected $ 200,000 in surveying and mapping.

Since oil exploration activities started in Uganda more than five years ago, investors prospecting for oil in Uganda's Albertine basin region have sunk more than $ 70 mm in drilling and exploration work over the past five years.
The world's current oil consumption stands at 80 mm barrels of oil per day having gone up from 65 mm bpd over the last five years. This jump in demand is a result of China and India's rising demand for oil. Locally, Uganda's demand for oil products is also rising at a rate of 6 % per day. Last year, Uganda consumed 700,000 cm of petroleum products worth $ 250 mm.

Per day, the country's fuel needs stand at 50,000 cm (1,000 litres make up 1 cm). Per capita consumption of petroleum in Uganda has grown from 16 litres in 1991 to 24 litres at end of 2004 and that figure must be higher now.
Regionally, East Africa spent $ 1 bn on petroleum productslast year and the demand is continuing to go up. The price for a barrel of oil at the world market currently stands at $ 72. With prospects of becoming an oil producer brightening, government is currently developing guidelines and regulations to address oil exploration, promotion, licensing, development and production.

Source: East African Business Week
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