Uganda will demand tougher terms in the next round of Production Sharing Agreements it plans to negotiate with foreign exploration firms eyeing its Lake Albert reserves, a senior government official has said. [ID:nLDE5BN0K1]
Following are some facts about Uganda’s oil industry and the companies operating in the east African country:
EXPLORATION AND PRODUCTION
* Uganda has nine oil exploration blocks, from the Sudan border in the north through Lake Albert on the western border with Democratic Republic of Congo and south to Lake George.
* The area runs over 500 km and about 45 km in width. Blocks 3B, 3C, 3D and 4A are open. The government froze licences in 2007 to create new regulatory policies.
* Only about a third of licensed areas have been explored.
* Uganda now believes it has confirmed oil reserves of 2 billion barrels, up from 300 million barrels in 2006, Finance Minister Syda Bumba said in June. The oil reserves are spread across a number of large blocks, including two near Lake Albert.
* Some industry estimates have suggested the country’s possible reserves could be as high as 8 billion barrels, although most oil companies believe this is too optimistic.
* Natural gas deposits have been found in many drilled areas, but no estimates on gas reserves are available.
* Foreign companies including British, Canadian and Australian firms have been drilling for oil over the last decade with some success, identifying many potential production areas.
* With the current pace of drilling and recent finds, geologists say Uganda could be producing around 150,000 barrels per day by 2015, making it a top 50 oil producers.
CONSUMPTION
* Uganda is currently an oil importer, bringing in thousands of barrels per day of refined oil products from Kenya.
* Uganda’s petroleum consumption has risen from 8,000 bpd in 1998 to more than 13,000 bpd in 2008.
* Uganda has had plans to build a refinery and wants to be able to begin output of oil products by 2011. An initial project focused on a small refinery for local needs, but in mid-2009 officials began to discuss a much bigger facility, possibly with a capacity of up to 100,000 bpd.
ENI
* Italian energy giant Eni has agreed to buy a 50 percent interest in exploration blocks 1 and 3A from UK explorer Heritage Oil <HOIL.L> in a deal worth up to $1.5 billion, expected to be completed in the first quarter of 2010.
* Heritage’s decision to sell the oil assets reflects a need to free up cash for investments elsewhere, rather than doubts over the prospects for Uganda’s oil industry, analysts say.
* The blocks cover the northern and southern end of Lake Albert bordering Congo and have estimated recoverable reserves of at least 300 million barrels of oil.
* As the crude oil under Lake Albert is heavy, the pipeline would need to be heated, making it an expensive project.
TULLOW
* Tullow Oil <TLW.L>, the other partner in the new Eni interests in Uganda, owns half of blocks 1 and 3a, amounting to 4,285 and 1,991 square km respectively.
* Tullow owns block 2, covering 4,675 square km, outright and is trying to sell up to half its share in it.
* Tullow has sunk more than 20 wells to date.
DOMINION
* Dominium Petroleum Ltd <DOPL.L> has a 100 percent stake in block 4b covering 2,021 square km with an estimated 378 million barrels of recoverable reserves.
TOWER RESOURCES
* Tower Resources <TOWR.L> and Global Petroleum <GBP.AX> have block 5, covering 6,040 square km. The companies drilled the first well in May/June 2009, but did not find any oil.
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