Oil exploration and production activities to continue as planned in Uganda

The ministry of Energy's Ernest Rubondo, who is the commissioner for Petroleum Exploration and Production Department, says oil exploration and production activities will continue as planned despite the on-going global financial crisis.
"Uganda's oil exploration prospects have had 100 % success. This makes it the most attractive portfolio and no oil investor would like to cutback the exploration budget in the Albertine Graben," he said.

"Instead, the companies are investing more in exploration because the business is commercially viable and profitable. Uganda and Ghana oil prospects are on top list."
Daudi Migereko, the Minister of Energy and Mineral Development, said: "Our strategy is to fast-track oil production from our oil and gas discoveries. This, we believe, will solve the fuel supply shortage we are now facing. The decision which will be done through an Early Production System is a medium and long-term strategic solution."

He elaborated that Uganda must stop depending on imported petroleum products from Kenya because "it is expensive, unreliable and uncontrollable."
The global credit crunch has caused a sharp retreat in crude oil prices. Oil prices have fallen by 70 % since hitting a record $ 147.27 a barrel in July. Uganda oil and gas reserves discovered so far at the Albertine Graben are about 1 bn barrels, top Tullow officials have disclosed.

The energy minister reaffirms that Uganda's oil and gas development is unlikely to grind to a halt.
"This is because the need for energy commodities will not shrink to zero in the foreseeable future, and there are still plenty of oil producers -- companies and states -- that see energy as a sound long-term business," said Migereko.

He said the exploration and production programme of oil in the country will not be stopped because we are looking at medium to long term strategic solutions. However, the oil boom in the Lake Albert region is remote, requiring massive high-cost investments and oil prices to be well above $ 80 a barrel to be profitable.
Energy experts expect that oil price panic threshold to be at $ 40 per barrel, which is the benchmark for oil majors to determine the viability of offshore oil and gas projects.

"Nevertheless, even if oil prices fall below this threshold in the immediate term (i.e. over the next one to two years), Exploration and Production investments will still continue," they predict.
Already, Heritage Oil and Gas, the firm exploring for oil and gas in the Albertine Graben has vowed to have a presence in frontier areas at an early stage and focus on large high-impact hydrocarbon prospects.