Transcript THE REPUBLIC OF U GANDA MINISTRY OF ENERGY AND MINERAL DEVELOPMENT PROGRESS ON PETROLEUM EXPLORATION AND DEVELOPMENT IN UGANDA at the OIL DEVELOPMENT, ENVIRONMENTAL CONSERVATION.

THE REPUBLIC OF U GANDA
MINISTRY OF ENERGY AND MINERAL DEVELOPMENT
PROGRESS ON PETROLEUM EXPLORATION AND
DEVELOPMENT IN UGANDA
at the
OIL DEVELOPMENT, ENVIRONMENTAL CONSERVATION AND LIVELIHOODS;
CIVIL SOCIETY COALITION ON OIL AND GAS (CSCO) STAKEHOLDER DIALOGUE
HOTEL AFRICANA KAMPALA, 14TH February 2014
PRESENTATION OUTLINE
1.
Introduction: Current Status
2.
Legal and Regulatory Framework
3.
Infrastructure Development
4.
National Participation
5.
Way forward
6.
Challenges
7.
Concluding Remarks
Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
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SUDAN
STATUS OF THE OIL AND GAS SECTOR
THE REPUBLIC OF U GANDA
RESOURCE BASE
30
•
•
31 0 E
LEGEND
Jobi Victoria
Ni l
e
Rii
Ngiri
Mpyo
Gunya
Jobi-East
Lyec
Rift Sediments
Exploration Area Boundary
N
Oil Discovery
20 N
Oil and Gas Discovery
Gas Discovery
La
0
ke
rt
be
Al
50 km
• One Production Licence
•
(Kingfisher) approved during
September 2013
Appraisal of the remaining 8
discoveries still ongoing and is
expected to be completed by end
of 2014
32 0 E
A lb e
in the Albertine Graben
18 discoveries taken forward for
appraisal
Appraisal for 10 of the discoveries
completed, and applications for
production license submitted
30 0 E
rt Nil
e
• 21 oil and/or gas discoveries made
Ngassa
Mputa
Nzizi
Waraga
DEMOCRATIC REPUBLIC
OF CONGO
10 N
Kasamene
Waihrindi
Nsoga
Ngege
Kigogole
Ngara
River Kafu
10 N 10
Kingfisher
er
Riv
Se m
20 N 20
UGANDA
li ki
30 0 E
32 0 E
31 0 E
Lake
Wamala
River Ka ton
ga
Discoveries in the Albertine Graben (Source: PEPD)
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Lake
George
00
STATUS OF THE OIL AND GAS SECTOR
THE REPUBLIC OF U GANDA
STATUS OF UPSTREAM ACTIVITIES
TOTAL E&P Uganda B.V
• Has submitted application for one
•
Production license – Ngiri Discovery
Appraisal of six discoveries in EA1 & 1A
Tullow Uganda Operations Pty Ltd
• Has submitted application for Production
License for eight discoveries in EA2
• Appraising one discovery in EA2
CNOOC Uganda Ltd
• Production License for the Kingfisher
Field approved.
• Development in Progress
Appraisal Areas in the Albertine Graben (Source: PEPD)
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STATUS OF THE OIL AND GAS SECTOR
1.2 EXPLORATORY AND APPRAISAL DRILLING
• 115 exploration and appraisal
wells drilled in the Albertine
Graben to date
DRILLING SUCCESS TREND IN THE ALBERTINE GRABEN
Discovery
Dry hole
• 101 wells encountered
hydrocarbons
30
13%
Success
25
Failure
5
87%
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Number of Wells
2
• 36 exploration wells and 79
appraisal wells
15
2
2
23
10
13
1
5
0
1
1
1
1
2002
2003
2004
2005
2006
• 28 wells have been flow tested
18
2
5
11
12
7
4
2007
2008
2009
YEAR
Drilling success trend (Source : PEPD)
2010
• Drilling success rate of over
85%
2011
2012
2013
• Crude blend between 230 – 330
API with very low sulphur and
is waxy
Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
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STATUS OF THE OIL AND GAS SECTOR
THE REPUBLIC OF U GANDA
UPSTREAM CAPITAL INVESTMENTS
INVESTMENT TREND IN THE OIL AND GAS SECTOR
Annual Investment
2500.0
Cummulative Investment
2,478.4
INVESTMENT (Million US$)
2000.0
Sharp increase in investment after
first commercial discovery
1,728.4
1500.0
1,393.6
This investment has been
important in progressing the
country’s oil and gas sector
1,074.1
1000.0
775.6
Expected to increase significantly
during development, production,
refinery
development
and
attendant pipelines development
509.7
500.0
231.8
3.0
3.2
3.5
7.6
12.6
27.7
47.7
59.7
105.7
0.0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1st Commercial Discovery
Drilling success trend (Source : PEPD)
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Investment by industry in seismic
surveys, exploratory and appraisal
drilling is projected at over
US$2.5billion by the end of 2013
YEAR
Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
1. STATUS OF THE OIL AND GAS SECTOR
1.5 ONGOING PROMOTION EFFORTS
 Participating in and presenting papers at International fora
such as at AAPG, SEG, Africa Upstream and EAPCE’13.
 Preparing to undertake a multi-client (non-exclusive) seismic
survey over unlicensed areas
 Commencing analysis of other sedimentary basins in the
country.
 Undertaking assessment of the oil and gas resources for all
discoveries and compilation of country resource report.
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2. THE LEGAL AND REGULATORY FRAMEWORK
THE REPUBLIC OF U GANDA
POLICY
The National Oil and Gas Policy (2008)
LAWS
•
•
NATIONAL OIL PETROLEUM
AND GAS
LEGISLATIONS
POLICY
PETROLEUM
REGULATIONS
PSA
•
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The Petroleum (Exploration, Development and
Production) Act, 2013 - Enacted in April 2013
Petroleum (Refining, Conversion, Storage and
Transportation) Act, 2013 – Enacted in July 2013
Formulation of a Bill for the management of
petroleum revenues (The Public Finance Bill) on
going and the Bill is currently in Parliament
Other relevant statutes and guidelines such as
Environment , Wildlife, Water, Income Tax, land
REGULATIONS
•
•
Available on: www.petroleum.go.ug
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© Petroleum Exploration and Production Department, Uganda
Petroleum (Exploration and production) (Conduct
of Exploration Operations) Regulations, 1993
New Petroleum Regulations expected by June
2014 to address aspects of Exploration,
Development, Production, HSE, NC and
Midstream among others
2.2 Other Practical Tools used to Regulate the Petroleum Upstream
Sector
a) Assessment of Technical Submissions: Review of Field Development Plans;
Well proposals, drilling programs, seismic survey plans, among others.
b) Monitoring of Costs of Petroleum Operations and Review of Work
Programs and Budgets.
c) Monitoring Field Activities on a full time basis and holding regular
operational meeting between Government and the licensed companies.
d) Monitoring Compliance of the Licensees; to the Laws, Regulations, PSAs
and other regulatory instruments through a License Management System.
e) Documenting and categorising the country’s petroleum resources.
f) Management of Petroleum Data.
Guidelines to support these tools have and continued to be developed.
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Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
OTHER REGULATORY TOOLS USED
Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
3. PLANS FOR INFRASTRUCTURE
DEVELOPMENT
3.1 Refinery Development
 Uganda’s petroleum products consumption
during 2012 was 27,000 bbl/day
 Regional consumption is about 200,000
bbl/day with a growth rate of 7%.
 Region has only one refinery with a capacity
of 70,000 bbl/day but has been operating at
half capacity.
 Reduced security of supply and high import
bill of about 1 billion USD annually.
 The EAC strategy for development of regional
refineries was adopted by Partner States in
2008. It recommended a refinery should be
developed in Uganda.
Refinery Distribution in Africa (Source: CITAC)
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Refinery Development; Progress
Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
PLANS FOR INFRASTRUCTURE
DEVELOPMENT (2)
Medium-large refinery
 Feasibility study for the development of a green field refinery in Uganda confirmed that
developing a refinery in Uganda was profitable.

Government procured a Transaction Advisor (Taylor DeJongh from USA) to support
structuring of the refinery development and source a lead investor.

Refinery to be developed on a Private – Public Partnership (PPP) basis

RFQ issued in October 2013 and six firms and/or consortia have been shortlisted. The
Ministry issued a detailed RFP during January 2014 to the six bidders:
•
•
•
•
•
•

Consortium led by China Petroleum Pipeline Bureau
MARUBENI Corporation (Japan);
Consortium led by PETROFAC (UK/UAE);
Consortium led by RT – Global Resources (Russia);
Consortium led by SK Energy (Korea); and
Consortium led by VITOL (Switzerland).
Lead investor to be procured by June 2014 and the first phase of the refinery (30k
bopd) expected in 2017/18.
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Refinery Development; Land AcquisitionMedium-large refinery

Processes of acquiring land in Kabaale, Buseruka
Subcounty, Hoima for refinery development is ongoing;

Survey of the land was undertaken by the Ministry
of Lands, Housing and Urban Devt.

Sensitisation of affected communities and
undertaking a Resettlement Action Plan in 2012

RAP approved and implementation commenced in
July 2013 with verification, disclosure of
compensation values, livelihood improvement and
financial management training and identification of
resettlement areas.

Payment of compensation packages commenced in
December 2013 and will be concluded in the first
half of 2014 as sensitisation continues

Environment baseline survey has been completed
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Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
PLANS FOR INFRASTRUCTURE DEVELOPMENT
PLANS FOR INFRASTRUCTURE DEVELOPMENT
REFINERY DEVELOPMENT MILESTONES
Feasibility
Study
2011
Feasibility Study
Land Acquisition
Environmental
Baseline Survey
Identification of
Lead Investor
FEED & EIA
EPC
Commissioning
Phase-1
FID
2012
2013
2014
2015
Commissioning
Phase-1
2016
2017
2018
2010 - 2011
2012 -- 2013
2012
2014
2013
2014
2014 - 2015
2015 - 2017
2017 - 2018
Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
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PLANS FOR INFRASTRUCTURE DEVELOPMENT
BASIN WIDE DEVELOPMENT
Jobi
Rii
Ngiri
Kasamene
Nsoga
Kigogole
Waihrindi
Ngassa
Mputa
Waraga
Kingfisher
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PLANS FOR INFRASTRUCTURE DEVELOPMENT
PIPELINES AND TRANSPORTATION FACILITIES
A study to evaluate development of
pipelines and storage facilities for crude
oil and gas in Uganda has been
concluded; Two routes; Northern and
Southern to a central hub/refinery
Plans are underway to develop a 205km
refined products pipeline from the
Refinery to Buloba, west of Kampala
where a terminal is planned.
Roads, water, electricity and other
infrastructure in the Albertine Graben
are being upgraded.
Refinery
Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
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Refined products
pipeline
REFINER
Y
PLANS FOR INFRASTRUCTURE DEVELOPMENT
THE REPUBLIC OF U GANDA
PIPELINE DEVELOPMENT
1. Crude Transportation Pipeline to refinery
The study to evaluate development of
pipelines and storage facilities was
completed in 2012;
 Two routes (Northern and Southern) to a
central hub/Refinery were identified
i. Northern route: 97km, 16-inch and,
ii. Southern route: 46km, 12.5 inch
 Cost of pipelines estimated at $185M
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PLANS FOR INFRASTRUCTURE DEVELOPMENT
THE REPUBLIC OF U GANDA
2. Crude Export Pipeline
 Three possible routes were evaluated
i.
Northern route to Lamu Port in Kenya,
1380km long
ii.
Central route to Mombasa, 1300km
long
iii.
Southern route to Dar es Salam,
1950km long
 The actual sizing of pipeline and
detailed routing to be completed with a
view of regional infrastructure
development once commercialization
plans are finalized
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NATIONAL PARTICIPATION
THE REPUBLIC OF U GANDA
 Government strongly encourages National
Participation as one of the optimum ways to
ensure sustainable development through:
• Partnering with the Ugandan investors,
• Use of local goods and services and
• Contribution to development of skills and
expertise through employment and
training in line with the industry quality
and safety standards.
 This is important because sustainable
development ultimately requires that a
country’s citizens are part and parcel of the
development process.
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NATIONAL PARTICIPATION
THE REPUBLIC OF U GANDA
Strategies to ensure National Participation
1. Regulation of inflow of expatriates; expatriate workers must acquire work
permits.
2. Requirement to develop Nationalisation Plans for expatriate positions
3. Approval of organisation structures for oil companies
4. Streamlining the procurement procedures for oil companies
5. Production Sharing Agreements (PSAs) provide for State Participation in the
range of 15% to 20%
6. Several aspects of national participation have been included in the new
petroleum legislation.
7. Capacity Building and Skills Development
8. Ministry is developing a National Content Policy
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NATIONAL PARTICIPATION
THE REPUBLIC OF U GANDA
NATIONAL ENTREPRENEURS
National Entrepreneurs are actively involved in provision of
services in the sector in the following areas;
1. Civil Works and Engineering,
2. Medical Services,
3. Clearing and Forwarding,
4. Environment Services (Consultancy and Waste Handling).
5. Security,
6. Catering and Camp Management
7. Freight Forwarders/Courier services
8. Rig Services( Movement and Mud logging)
9.
Office Facilities and Equipment
10. Equipment lifting services
11. Engineering services
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12. Communications and ICT
NATIONAL PARTICIPATION
THE REPUBLIC OF U GANDA
EMPLOYMENT BY OIL COMPANIES
• Licensed companies in the country
are employing an increasing number
of Ugandans
• Tullow employed a total of 203
people in 2013, out of which 80%
are Ugandans
• CNOOC plans to employee 115
people in 2014 out of which 70% are
Ugandans
• Total employs over 500 people out of
which 80% are Ugandans
• These numbers are expected to
increase as more Ugandans acquire
skills in the oil and gas sector.
Hundreds of semi-skilled and unskilled workers are
employed from the local communities during operations
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NATIONAL PARTICIPATION
THE REPUBLIC OF U GANDA
INTERNATIONAL OIL SERVICES COMPANIES
 Some of the world’s largest oil service companies are now resident
and have opened up bases and yards in the country;
 Schlumberger; US$79.57 billion
 Halliburton; US$24.64 billion
 Baker Hughes; US$16.74 billion
 Weatherford; US$8.91 billion
 These service companies are also providing training and employment
opportunities to Ugandans
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Employment

Majority of these jobs will be through indirect
employment.

Employment curve for the oil and gas industry is
such that employment increases during the
development stage where a lot of infrastructure is
put in place.

Acquisition of certified vocational skills is therefore
important as these stage will require artisanal and
technical skills.

As the activities progress towards actual
production, more highly skilled labour is required
and high technology utilized, with less man-hours.

Emphasis for communities therefore is to focus on
employment but also service provision.

Causal labour sourced from the local community
and provide opportunity to build skills
Hundreds of semi-skilled and unskilled
workers are employed from the local
communities during operations
Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
5. COMMUNITY PARTICIPATION
Newly recruited workers undergoing survey training by BGP
personnel in preparation for the 3D data acquisition
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
Medium-large
refinery Acts; to be
Development of regulations to support the new upstream
and midstream
in place during 2014.

Preparations for Licensing through competitive bidding rounds starting with areas with
good data coverage is going on

The Ministry will undertake speculative surveys in the unlicensed areas to inform the
fiscal terms.

Establishment of the Petroleum Authority and National Oil Company await
appointment of the board by the President. The board will be approved by Parliament.

National Content Policy to be developed through a consultative process.

Procurement of a lead investor for the refinery to be concluded in the first half of
2014.

Development of a National Strategic Plan for Pipelines development has commenced.

Development of an implementation plan for the Strategic Environment Assessment
will follow its adoption by Cabinet.

Continue with implementation of the communication strategy for the oil and gas
sector

Implementation of the Monitoring and Evaluation Framework for the NOGP
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Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
6. WAY FORWARD
7. CONCLUDING REMARKS
 Uganda’s oil and gas sector is taking shape, the regulatory for the upstream
sector has been finalized, institutional framework is being put in place to
manage the resources and the infrastructure to support the development
is being built.
 Taking forward the sector will require joint and harmonized efforts on the
part of the respective stakeholders.
 The Ministry of Energy ad Mineral Development recognizes and
appreciates the support by other Government Institutions, Oil Companies,
Development partners, Civil Society and other stakeholders in the
implementation of the different aspects of the National Oil and Gas Policy
for Uganda.
Ministry of Energy and Mineral Development, Petroleum Exploration and Production Department
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THANK YOU
For Further information:
Permanent Secretary, Ministry of Energy and Mineral Development
Email: [email protected]
[email protected]/ [email protected]
www.petroleum.go.ug